“Lack of confidence in the economy is translating to a retreat to the safer dollar and is also causing pessimism about oil demand,” said John Kilduff, partner at Again Capital LLC in New York.
But Fed Governor Michelle Bowman said in prepared remarks that the US central bank probably will need to raise interest rates further if inflation stays high. TheThere could be a situation where US inflation decelerates further and the dollar’s value declines, with European inflation staying high, said Thierry Wizman, Macquarie’s global FX & interest rates strategist in New York.
“You couple earnings estimates starting to go up with a Fed on hold, and that’s a formula for good things to happen,” Hayes said. The 2-year Treasury yield, which often moves in step with interest rate expectations, was up 8.8 basis points at 3.994%.