Federal Reserve Pauses Future Cuts; Bond Markets Signal Doubts

   2019-11-07       35        Business
Rating :
The Federal Reserve: The Federal Reserve has halted lowering rates. But the bond market is not convinced even after policymakers signaled the pause unless the economic outlook changes significantly.

Federal Reserve Pauses Future Cuts; Bond Markets Signal Doubts

The Federal Reserve: The Federal Reserve has halted lowering rates. But the bond market is not convinced even after policymakers signaled the pause unless the economic outlook changes significantly.

Minutes following the Federal Reserve’s decision to cut rates for the third time meeting cited implications of global developments. Also, overnight swap rates fully priced out a December rate.  But the bond market still sees another possible reduction by November 2020.

Treasury yields dropped across the curve, with longer maturities leading.

Investors are trying to divine the Fed’s path as reactions intensify focus on crucial U.S data in the days ahead. The focus starts with Friday’s figures on the labor market and manufacturing.

Jerome Powell- the Fed Chairman, said the monetary policy was in the right place. However, Rich Sega thinks the reaction in the markets reflects a gloomy take on the economic outlook.

Sega says the rally in treasuries and lower yields following the press conference meant markets thought the economy was slowing and remained pessimistic.

Rich Sega is the global chief investment strategist at Conning. Conning manages about $171 billion in assets.

Powell’s positive assessment and the fleeting optimism

Powell, in a press conference, noted that risks around Brexit and trade tensions show signs of improvement.

On Wednesday, the benchmark 10-year Treasury yields dropped close to 7 basis points. On Thursday, they gained one basis point to 1.78% in Asia. The yield curve flattened while the Bloomberg Dollar index extended its declines.

Agreeing with Powell’s assessment is Chris Rands a Portfolio Manager at Nikko Asset Management in Sydney. Rands argued that bond markets have been too aggressive in pricing more cuts. According to him, Treasury yields will climb to 2% in 3-6 months.

Rands further says that markets are hitting their targets, with U.S unemployment being at its lowest in 50 years.

The Federal Reserve decision came after the Commerce Department reported better than expected economic growth in the third quarter. Consumer spending drove economic growth.

But despite the positive assessment, some fund managers and analysts suspect the brightening prospects may prove fleeting.

Author Signature :


Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education 

100x100
Amanda Bliss

Amanda Bliss is our senior reporter writing on Economy News. Ms. Bliss is a Georgetown graduate specializing in economic and political sciences. Her Ph.D. concentrates on the market impact on the glob..


Random Articles

New Commercial Project M3M Prive 73 in Gurgaon
New Commercial Project M3M Prive 73 in Gurgao..
   2019-07-30       135        Business
Best Marketing & Advertising Agency in Delhi-Quadravision
Best Marketing & Advertising Agency in Delhi-..
   2019-09-25       52        Business
Best brand design agency in delhi-Algorrithm
Best brand design agency in delhi-Algorrithm..
   2021-02-25       16        Business
How to trained your dog?
How to trained your dog?..
   2020-06-04       30        Shopping
Know how much it costs to create a Taxi-booking Mobile App-like Uber
Know how much it costs to create a Taxi-booki..
   2019-08-02       89        Internet
Newborn Hyperthyroid Screening Guidelines
Newborn Hyperthyroid Screening Guidelines..
   2019-06-28       122        Health
What does virgin hair mean?
What does virgin hair mean?..
   2020-06-04       56        Fashion
Tax Process for Drake Tax Software Hosting
Tax Process for Drake Tax Software Hosting..
   2021-03-20       12        Technology
Goa: The Ultimate Honeymoon Destination & Why
Goa: The Ultimate Honeymoon Destination & Why..
   2019-02-20       160        Services
How to Glamorize Events with  Ushers and Security Bouncers in Lagos
How to Glamorize Events with Ushers and Secu..
   2019-08-07       106        Services
Global Solar Electric Power Generation Market is Estimated to Reach $435 b
Global Solar Electric Power Generation Market..
   2019-09-06       96        Business
Types of Men's Formal Shirt - Be Apparel USA
Types of Men's Formal Shirt - Be Apparel USA..
   2020-01-07       59        Shopping
ISO 45001 Certification in Bangladesh | OHSAS 18001 Certification
ISO 45001 Certification in Bangladesh | OHSAS..
   2019-12-10       44        Business
ABOUT US

Some quick example text to build on the card title and make up the bulk of the card's content Some quick example text to build on the card title and make up the bulk of the card's content Some quick example text to build on the card title and make up the bulk of the card's content.

TOP AUTHORS
Thomas Shaw
thomasshaw9688@gmail.com
Total Posts : 13117
zero promosi
zero1601@gmail.com
Total Posts : 1933