The bond market rebels as it adjusts to the Federal Reserve’s inflation policy

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The Fed unwittingly launched a bond market rebellion, sending the key interest rate that influences mortgages and other loans sharply higher.

Tony Crescenzi, portfolio manager and market strategist at Pimco, said the market is also pricing in the fact that the Treasury will have to issue a lot of supply to pay for fiscal stimulus, given the most recent $1.9 trillion package and prior pandemic programs.

He said the stock market would be concerned if the pace of the interest rate move remains rapid, but if it is able to adjust to the increases gradually it would not be a problem. "By indicating it will delay its rate hike until inflation picks up and employment goes back to maximum employment, the anchor for inflation expectations is not as strong," he said, "That's what's letting the inflation component in the rise in yields become unleashed, to an extent."

 

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CNBC has been lying about interest rates and bond yields all day

Really

If the FED isn't buying, nobody else is going to buy. The only reason to buy bonds was for capital gains; to sell to the greater fool (i.e. the FED).

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Adjust to what? They didn't make any changes yet! Rising Bond rates means 20% StockMarket correction!

Powell wants to ignore monetary history. The market is infatuated with it. Obsessed even. federalreserve stlouisfed Arthur Burns. Paul Volker. monetaryPolicy economics econ101 stocks Finance

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