US Treasury Decrease Resume After Federal Reserve Board Jay Powell Remarks

Government bond prices continue to hit Thursday after comments from Federal Reserve Chairman Jay Powell failed to reassure investors, saying benchmark stocks will wipe out profits for the year Prompted.

Yields on 10-year Treasuries rose 0.05 points from the previous day to 1.54% as prices fell, and continued to rise sharply, extending to debt issued by other countries.

In equities, the benchmark S & P 500 Index expanded its recent losses, wiped out the rise over the past year and fell 1.7%. The technology-focused Nasdaq Composite fell 2.4%.

Investors have been waiting to see if the Fed responds to the big sellouts of government bonds in recent weeks with stronger messages and hints of new interventions to calm the market.

At an event hosted by The Wall Street Journal, the Fed chair said he was “concerned” about the consistent tightening of fiscal conditions and that the central bank was “patient” in the face of a temporary rise in inflation. But before his comment, ING analysts said investors were looking for “signs of a change in tack against bond market sellouts.”

The 10-year Treasury yield, which acts as a benchmark for borrowing costs and asset prices around the world, has risen sharply from about 0.9% at the beginning of the year. According to the Bloomberg Barclays Index, long-term government bond prices have fallen by about 10% so far this year.

In currencies, the dollar surged about 0.6% against a basket of half a dozen major currencies on Thursday, tracking a rise in Treasury yields.

Investors offload the Treasury as President Joe Biden promotes his $ 1.9 trillion coronavirus rescue package through the U.S. parliament, saying heavy stimulus will bring strong economic growth and inflation Is raising expectations. A key indicator of medium-term inflation expectations, known as the break-even point for five years, was 2.51% on Thursday, the highest level since 2008.

Break-even rate (%) line chart showing US inflation expectations boosted

The Federal Reserve Board of Governors puts at least $ 120 billion in financial assets each month to add liquidity to financial markets as part of an emergency response to a pandemic that helped push the global equity market to a record high. I keep buying.

In Europe, both the Stoxx600 stock index and the FTSE 100 fell 0.4% to end the day. Brent crude, the international oil benchmark, rose 5% to just under $ 67 a barrel after Opec and its allies refrained from significantly increasing production.

US Treasury Decrease Resume After Federal Reserve Board Jay Powell Remarks

Source link US Treasury Decrease Resume After Federal Reserve Board Jay Powell Remarks

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