Quantitative tightening is "an underappreciated risk" that might keep bond yields higher for longer. Auctions of 10- and 30-year Treasuries were poorly received this month, and supply will keep increasing, thanks to the widening budget deficit.
January's personal consumption expenditures (PCE) price index came in hotter than expected today, rising 5.4% from a year earlier vs. a 5% increase in December.
Even as they initiated another big rate hike, Fed officials signaled they might be entering the final phase of their aggressive campaign to curb inflation.
Tomorrow's U.S. Department of Labor jobs report might "put a stamp of confirmation" on indications that the economy is very resilient—and convince the Fed to initiate another 75 bps increase in interest rates.
Facing the hottest cost pressures in 40 years, policymakers have lifted the target for the federal funds rate by 1.5% over the past two months—the steepest increase since the price-fighting era of Paul Volcker in the early 1980s.
DebugScreen: mobile
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{
"uri": "/2023/10/25/bond-markets-vicious-cycle-risk-puts-spotlight-on-fed-qt/",
"title": "Bond Market's 'Vicious Cycle' Risk Puts Spotlight on Fed QT",
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"prettyDate": "October 25, 2023",
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"summary": "Quantitative tightening is \"an underappreciated risk\" that might keep bond yields higher for longer. Auctions of 10- and 30-year Treasuries were poorly received this month, and supply will keep increasing, thanks to the widening budget deficit.",
"body": null
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{
"uri": "/2023/10/19/powell-signals-fed-will-stay-on-hold/",
"title": "Powell Signals Fed Will Stay on Hold",
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"prettyDate": "October 19, 2023",
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"summary": "But the prospect of a future rate hike is still on the table.",
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{
"uri": "/2023/08/15/the-feds-interest-rate-debate-is-shifting/",
"title": "The Fed's Interest Rate Debate Is Shifting",
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"prettyDate": "August 15, 2023",
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"summary": "The debate is shifting from how high rates need to go to how long they should stay elevated.",
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{
"uri": "/2023/06/14/fed-pauses-interest-rate-hikes/",
"title": "Fed Pauses Interest Rate Hikes",
"byline": "Jonnelle Marte & Craig Torres",
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"prettyDate": "June 14, 2023",
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"summary": "But Chairman Powell says nearly all officials expect \"somewhat further\" increases, whether in July or beyond.",
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{
"uri": "/2023/02/28/fed-officials-flag-risk-of-sticky-inflation/",
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"byline": "Jonnelle Marte & Craig Torres",
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"prettyDate": "February 28, 2023",
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"summary": "January's personal consumption expenditures (PCE) price index came in hotter than expected today, rising 5.4% from a year earlier vs. a 5% increase in December.",
"body": null
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{
"uri": "/2022/11/02/interest-rates-rise-another-75-basis-points/",
"title": "Interest Rates Rise Another 75 Basis Points",
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"prettyDate": "November 02, 2022",
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"summary": "Even as they initiated another big rate hike, Fed officials signaled they might be entering the final phase of their aggressive campaign to curb inflation.",
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{
"uri": "/2022/10/14/fed-officials-looking-at-higher-peak-for-rates/",
"title": "Fed Officials Looking at Higher Peak for Rates",
"byline": "Steve Matthews, Craig Torres & Jonnelle Marte",
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"prettyDate": "October 14, 2022",
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"summary": "Persistent high inflation may lead the Fed to keep up the regular rate hikes till the fed funds rate reaches 5.5%.",
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{
"uri": "/2022/09/01/28021/",
"title": "Jobs Data May Push Fed to Third Jumbo Rate Hike",
"byline": "Reade Pickert & Jonnelle Marte",
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"summary": "Tomorrow's U.S. Department of Labor jobs report might \"put a stamp of confirmation\" on indications that the economy is very resilient—and convince the Fed to initiate another 75 bps increase in interest rates.",
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{
"uri": "/2022/08/05/sizzling-u-s-jobs-data-makes-a-case-for-bigger-fed-rate-increases/",
"title": "'Sizzling' U.S. Jobs Data Makes a Case for Bigger Fed Rate Increases",
"byline": "Steve Matthews & Jonnelle Marte",
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"prettyDate": "August 05, 2022",
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"summary": "Although markets expect rate cuts in 2023, the renewed momentum in the labor market might convince the central bank to keep rates higher for longer.",
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{
"uri": "/2022/07/27/fed-hikes-by-75-bps-for-a-second-time/",
"title": "Fed Hikes by 75 bps for a Second Time",
"byline": "Jonnelle Marte & Catarina Saraiva",
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"prettyDate": "July 27, 2022",
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"summary": "Facing the hottest cost pressures in 40 years, policymakers have lifted the target for the federal funds rate by 1.5% over the past two months—the steepest increase since the price-fighting era of Paul Volcker in the early 1980s.",
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