Will the Fed really 'lose control' of the bond market?

  • 📰 KitcoNewsNOW
  • ⏱ Reading Time:
  • 58 sec. here
  • 31 min. at publisher
  • 📊 Quality Score:
  • News: 127%
  • Publisher: 78%

Kitco News News

Gold,Silver,Platinum

The Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.

ORLANDO, Florida, Nov 5 - When Federal Reserve Chair Jerome Powell and his colleagues meet this week to discuss their next interest rate move, they'll face a much more complicated situation than they did only two months ago, due to the historic rise in long-dated Treasury yields since the central bank's jumbo rate cut on Sept. 18.

But it likely also reflects the solid economic growth and sticky inflation indicators seen in the United States since September, which have raised doubts about the wisdom of the Fed's decision to start its easing cycle with a cut of 50 bps. What happens if this belief in the Fed's 'control' is challenged, and what might the central bank do to avoid this crisis of faith?Treasury yields are elevated, but not frighteningly so. The 10-year yield is currently around 4.30%, and the 30-year yield is near 4.50%.

U.S. markets are currently a long way from Constan's worst-case scenario, but what he's highlighting is how quickly things could unravel. But this hawkish pivot may not come naturally to Chair Powell, who has struck a dovish tone in his public comments over much of the last two years, even as the Fed was raising rates.While U.S. GDP growth remains solid, cracks are starting to appear in the labor market. The paltry 12,000 jobs added in October may primarily reflect one-off exogenous events, but the previous months' totals were revised down as well, indicating weakening conditions.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 13. in BUSÄ°NESS

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Kitco Crypto Reporter Jordan Finneseth Brings Psychology Background to Market CoverageThis article introduces Jordan Finneseth, a Crypto Market Reporter for Kitco Crypto. It highlights his background in psychology and human behavior and how it informs his coverage of the cryptocurrency market.
Source: KitcoNewsNOW - 🏆 13. / 78 Read more »

Jim Wyckoff Brings Decades of Market Expertise to Kitco NEWSLearn about Jim Wyckoff's extensive background in the stock, financial, and commodity markets, including his roles as a journalist, analyst, and consultant.
Source: KitcoNewsNOW - 🏆 13. / 78 Read more »