Treasury yields fell on Thursday morning as investors digested rising Fed inflation expectations, suggesting that interest rate hikes would come sooner than expected.
The Federal Reserve Board Headline inflation expectations up to 3.4%Percentage points completely higher than expected in March, after the two-day policy meeting ended on Wednesday afternoon.
However, the post-meeting statement reiterated the Fed’s view that inflationary pressures are “temporary.”
The Federal Reserve Board also said in March that there would be no rise until at least 2024, and then indicated that a rate hike could occur in 2023. The so-called dot plot of individual member expectations showed two rate hikes in 2023.
Nonetheless, Federal Reserve Board Chair Jerome Powell said in a post-meeting press conference that central bank forecasts need to be taken in a “big pinch of salt.”
However, Powell did not provide guidance on when central banks would begin to curtail their bond purchase programs.
Zachary Griffith, Senior Macro Strategist at Wells Fargo Securities, said on CNBC’s “Squaw box europe“On Thursday, Treasury yields were much lower than earlier this year, but his company believed that yields would continue to rise.
He said this would be driven by both the resumption of the global economy in a pandemic recovery and the federal government, which has begun to think about tapering asset purchases “at some point in the future.”
By downplaying the predictions of certain central bank members, Griffith seemed to “degass the property” and “do everything possible to make it a step-by-step process as much as possible.” It seems. “
For data submitted on Thursday, the number of weekly unemployment claims filed during the week ending June 12 is set to be released at 8:30 EST.
The auction will take place on Thursday with a $ 40 billion four-week invoice, a $ 40 billion eight-week invoice, and a $ 16 billion five-year Treasury inflation protection policy.
— — Jeff Cox of CNBC contributed to this market report.
Treasury yields fall despite the latest Federal Reserve Board information
Source link Treasury yields fall despite the latest Federal Reserve Board information