Reply To: Bond Traders Weekly Outlook: Yield Curve Pressured Ahead of September Data Drop


Bond Losses Widened After Powell

U.S. Treasuries trade on their lows with the 2-yr note holding a solid loss while the long bond outperforms, sitting just below its flat line.

Treasuries have seen some early volatility inside a narrow range, as the market responded to Fed Chairman Powell’s speech from the Jackson Hole Symposium.

The Fed Chairman said that the central bank is prepared for more rate hikes, though he also said that policymakers are in a position to “proceed carefully” when it comes to assessing incoming data. Mr. Powell said that the goal is to hold policy at a restrictive level until there is confidence that inflation is slowing toward the objective.

He also acknowledged that the economy has not been cooling as expected, which could be viewed as a signal that more rate hikes are in the works.

Equities are little changed with the S&P 500 (+0.1%) trading a step behind the Nasdaq (+0.2%) while the Dow (unch) is continuing its recent underperformance.

2-yr: +9 bps to 5.10%
3-yr: +6 bps to 4.77%
5-yr: +7 bps to 4.47%
10-yr: +4 bps to 4.27%
30-yr: +1 bp to 4.31%