Fed stance and BOE rate cut expectations impact bond yields and

7 нояб. 2023 г.

After the latest monetary policy meeting, financial markets reacted to statements from US Federal Reserve Chairman Jerome Powell and the Bank of England (BoE). These reactions led to large changes in bond yields and the value of the dollar.
After the Federal Open Market Committee (FOMC) meeting, markets tilted toward a cautious interpretation of Powell's remarks, even though the Fed maintained its hawkish stance. Despite recognition of the US's strong economic performance, concerns about tightening financial conditions and questions about the reliability of scatterplots have led to suggestions that US interest rates may have peaked. There is. This sentiment has led to lower bond yields and a decline in the value of the dollar. In contrast, three out of nine Monetary Policy Committee members at the BoE meeting supported a 25 basis point rate hike. However, rising UK unemployment and a forecast of zero growth in 2024 pose major challenges, with GBP/USD moving above previous support/resistance levels as the dollar weakens and US yields fall. Rose.