Federal Reserve policymakers’ updated forecasts for their benchmark interest rate, due Wednesday, are looming as a key potential decider for a US Treasuries market at risk of a third straight year of losses.
While Chair Jerome Powell has sometimes downplayed the importance of so-called dot plot projections, they loom large given an aversion by him and his colleagues to offer much specific verbal guidance about the policy outlook. That’s even more the case for the Sept. 19-20 policy meeting, given near-universal expectations for the Fed to keep rates on hold this time.
Last Wednesday’s consumer price index release only complicated officials’ task. While the trend from recent months showed softer CPI gains, the core monthly gain — which strips out volatile energy and food items — accelerated in August. Two-year Treasuries would likely sell off if policymakers this week keep intact a median forecast for one more hike in 2023 and trim rate cuts for 2024, Bank of America strategists recently warned. That, they say, may upend bets placed by some investors for a steeper yield curve — in other words, a diminishing premium for two-year yields over 10-year ones.Two-year yields were over 5% late Friday, and not far from the 16-year high seen in July. Ten-year yields were above 4.3%.
That would bode poorly for the overall market, which just capped its fourth straight month of losses, a Bloomberg index shows. The gauge is roughly flat for the year, a major disappointment for investors walloped by a 12.5% loss last year that was unprecedented in annual data going back to the early 1970s.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed’s Higher-for-Longer Mantra Has Doubters in Bond Market(Bloomberg) -- Amid signs the bond market has bought into the Federal Reserve keeping interest rates higher for longer, a cohort of investors is placing bets on the economy hitting a wall — and a sharp policy reversal in short order.Most Read from BloombergUltra-Rich Buy Ultra-Luxury Counseling to Get Kids Into HarvardMGM Resorts Hackers Broke In After Tricking IT Service DeskDisney Talks on ABC Sale Heat Up as Byron Allen Makes OfferCanada Postpones Trade Mission to India With Tensions On RiseA
Read more »
LILLEY: Trudeau's ego puts trade with India and jobs at riskCanada\u0027s relations to India have sunk even lower with a scheduled trade trip being cancelled days after Trudeau\u0027s disastrous trip ended.
Read more »
Third suspect arrested in murder of 67-year-old Toronto manA third suspect has been arrested in connection with the killing of a 67-year-old man in the city’s Weston neighbourhood last month.
Read more »
Third person charged with murder of 67-year-old man in WestonToronto Police made a third arrest on Saturday in a murder investigation that occurred in the city\u0027s Weston neighbourhood last month.
Read more »
Third person charged with murder after man found dead in Toronto apartmentA third person has been charged with first-degree murder after a 67-year-old man was found dead in a Toronto apartment in August, police say.
Read more »
LILLEY: Trudeau's ego puts trade with India and jobs at riskCanada\u0027s relations to India have sunk even lower with a scheduled trade trip being cancelled days after Trudeau\u0027s disastrous trip ended.
Read more »