Investors Brace for Fed Chair Powell’s Speech as Treasury Yields Climb Higher

U.S. Treasury yields ticked up on Tuesday as investors anticipated a speech from Federal Reserve Chairman Jerome Powell. The 10-year Treasury yield rose to 4.396%, while the 2-year yield increased to 3.871%. The 30-year yield also climbed to 4.966%.

Investors are keen to hear Powell’s insights, especially concerning monetary policy. The ongoing tensions surrounding his position, particularly due to calls from former President Donald Trump for his removal, add intrigue to the event.

U.S. Treasury Secretary Scott Bessent recently suggested it’s time to reevaluate the Federal Reserve’s performance. In an interview on CNBC’s “Squawk Box,” he pointed out that if the Fed were a different agency, like the FAA, it would likely face scrutiny after making numerous mistakes. Bessent raised concerns about the Fed’s decision to maintain interest rates this year, especially given the low inflation levels.

He remarked, “It seems they can’t break out of a certain mindset.”

This week, economic data releases are minimal. Still, investors will be on the lookout for existing home sales on Wednesday, initial jobless claims, and new home sales data on Thursday. Friday will bring information about durable goods orders, which is crucial for understanding economic health.

Recent statistics suggest that inflation has remained below expectations, making the Fed’s decisions even more pivotal. In a survey from the Federal Reserve Bank of New York, 64% of economists expect inflation to stay low through the end of 2024. This could further pressure the Fed to rethink its strategies.

Overall, Powell’s upcoming remarks could shape how investors view the future of U.S. monetary policy and the economy at large. The market’s reaction will be closely watched as participants digest his comments.



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