Tariffs continue to be the major market concern, considering its potential impact on inflation, and at the last distance - the decision of the Fed to cut interest rates during the course of this year. The US Administration continues to urge the Fed to cut interest rates, noting that this is the right moment for such a move, while Fed Chair Powell refuses to comment. However, during the previous week, Powell publicly noted that the US economy might be hurt with tariffs in terms of higher inflation. This was not something that the markets were happy to hear, as it meant the possibility of even no rate cuts during the course of this year. The US Treasury yields reacted to this comment from Powell, bringing back volatility to the bond market.
The 10Y US Treasury benchmark started the week around 4,48%, and was traded toward the downside during the course of the week. The lowest weekly level was achieved on Wednesday, at 4,27%, but the reversal came on Thursday, when yields reverted back toward the 4,33%. Analysts are still cautious to bring their revised forecast for the US economy. Firstly, because the tariffs are so uncertain, and change almost on a daily basis, where it is extremely hard to bring into the light forecast of their impact on the US economy. However, as long as the US Administration uses tariffs narrative, the volatility on the market will continue.
The 10Y US Treasury benchmark started the week around 4,48%, and was traded toward the downside during the course of the week. The lowest weekly level was achieved on Wednesday, at 4,27%, but the reversal came on Thursday, when yields reverted back toward the 4,33%. Analysts are still cautious to bring their revised forecast for the US economy. Firstly, because the tariffs are so uncertain, and change almost on a daily basis, where it is extremely hard to bring into the light forecast of their impact on the US economy. However, as long as the US Administration uses tariffs narrative, the volatility on the market will continue.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.