U.S. stock futures hold gains after a report showing rising inflation

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Budget deadlines on Wall Street have risen, and U.S. government bonds were silenced on Friday as traders assessed data showing that the U.S. inflation rate rose to its highest level in nearly four decades last month.

Contracts betting on the S&P 500 index with blue chips rose 0.6 percent, while contracts on the technology-focused Nasdaq 100 received the same amount.

Yields on two-year US Treasury bonds, which range from the price of the sovereign debt instrument and closely follow monetary policy expectations, were stable at 0.69 percent.

The Department of Labor said U.S. consumer prices rose 6.8 percent in November from the same month in 2020, the highest rate since June 1982. The previous month’s inflation rate was 6.2 percent.

The release came after a report Thursday showed that claims for unemployment benefits in the U.S. fell on theirs last month. lowest level since 1969, although many investors expect that inflation will now peak and that the Federal Reserve will keep borrowing costs relatively low.

“The U.S. economy is in a reasonably healthy place,” said Paul Jackson, head of asset allocation research at Invesco Fund Manager. “If the Fed does not withdraw some of its support now and begin to normalize monetary policy, it will have very little ammunition when we enter the next recession.”

“The bond market tells us that inflation won’t get out of control for long,” said Guillaume Paillat, Aviva Investors ’multi-asset portfolio manager.

The Fed bought about $ 120 billion in government and mortgage bonds a month during the pandemic, lowering borrowing costs and boosting stock market sentiment.

A quick halt to the program could be completed by March, as the forerunner of the world’s most influential central bank raising interest rates from the currently record low, leading economists surveyed told the Financial Times.

“We expect inflation of close to 4 percent on average next year,” said Christophe Donay, head of asset allocation at Pictet. He added that markets have “great faith in the Fed and other central banks and governments moving to support the economic cycle” if Omicron or other new variants of the coronavirus cause long-term disruptions for consumers and businesses.

“When risks grow, markets believe the Fed will slow its tightening,” he said.

In Asia, the Hang Seng index in Hong Kong fell 1.1 percent, reflecting a fall on Wall Street in the previous session. The Nikkei 225 in Tokyo finished 1 percent lower. The FTSE emerging market stock index fell 0.6 percent.

In currencies, the dollar index, which tracks the performance of the U.S. currency against six others, rose 0.1 percent. Sterling weakened 0.2 percent against the dollar to just under $ 1.32.

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