Treasury Yields Resume Rise as Effects of Stock Sell-Off Subsides

Mild Increase in Retail Sales

September saw a mild rise in retail sales, edging higher by 0.1% based on the latest data released by the Commerce Department–a 0.6% rise was forecasted by a Reuters poll of economists.

Automobile vehicle sales posted a rebound, but its gains were offset by the biggest drop in spending at restaurants and bars in nearly two years. Nonetheless, retail sales did rise by 4.6% compared to a year ago.

“The net result still appears to be a fairly strong quarter for consumer spending growth,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in White Plains, New York.

“Higher rates can dampen consumer spending and bite into corporate profits,” said Nathan Slaughter of StreetAuthority. “Given that this record bull market has been fueled in large part by accommodative monetary policy and dirt-cheap capital, there is a fear that rising rates could end the party.”

For more trends in fixed income, visit the Rising Rates Channel.