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FOMC Members Signal Policy 'At or Near Peak' for Tightening Cycle
Yellen: Biden's pandemic spending may "slightly" drive up inflation, a stronger economy fuels U.S. debt selling.
Yellen stated that the government spending following the pandemic is necessary, and that high inflation mainly stems from supply chain issues; she is confident that inflation remains on a downward trajectory; the current sell-off of U.S. Bonds is due to the economy being stronger than expected, leading to a repricing of market interest rate expectations, but the term premium has begun to normalize; she hopes the Trump administration will take the deficit seriously and does not wish to see the 'Bond Vigilantes' make a comeback; after leaving her position as Treasury Secretary, she may return to the Brookings Institution.
Continuing with the 10-year U.S. Treasury bond, the newly released 30-year U.S. Treasury bond auction rate has also reached the highest level since 2007.
On Wednesday, the USA Treasury auctioned 22 billion dollars of 30-year government bonds, with the results similar to the Tuesday auction of 10-year bonds, both receiving winning rates that reached new highs since 2007.
Fed Isn't Certain Where Interest Rates Will Head, Minutes Show. Inflation and Trump Are Concerns
US10Y Soars About 100 Bps Since Fed Rate Cuts, Signaling a Diverging Inflation Outlook
The initial claims for unemployment benefits have dropped to the lowest level in 11 months! The market is beginning to bet that the Federal Reserve will not cut interest rates in 2025.
Last week, the number of first-time jobless claims in the USA unexpectedly decreased, reaching the lowest level in 11 months.
