{"id":57246,"date":"2021-03-25T06:53:21","date_gmt":"2021-03-25T11:53:21","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57246"},"modified":"2021-03-25T06:53:21","modified_gmt":"2021-03-25T11:53:21","slug":"weekly-commentary-powell-on-inflation","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57246","title":{"rendered":"Weekly Commentary: Powell on Inflation"},"content":{"rendered":"

Weekly Commentary: Powell on Inflation<\/a><\/h3>\n
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The Treasury yield spike runs unabated. Ten-year Treasury yields rose another 10 bps this week to 1.72%, the high since January 23, 2020. The Treasury five-year \u201cbreakeven\u201d inflation rate rose to 2.65% in Tuesday trading, the high since July 2008. The Philadelphia Fed\u2019s Business Survey Prices Paid Index surged to a 41-year-high. In the New York Fed\u2019s Manufacturing Index, indices of Prices Paid and Received both jumped to highs since 2011.<\/div>\n<\/div>\n
\nWhile crude oil\u2019s notable 6.4% decline for the week spurred a moderate pullback in market inflation expectations (i.e. \u201cbreakeven rates\u201d), this did not translate into any relief in the unfolding Treasury bear market.<\/p>\n

Chairman Powell was widely lauded for his adept handling of Wednesday\u2019s post-FOMC meeting press conference. He was well-prepared and could not have been more direct: The Federal Reserve will not anytime soon be contemplating a retreat from its ultra-dovish stance. It was music to the equities mania, as the Dow gained 190 points to trade above 33,000 for the first time. Treasury yields added a couple bps, but without any of the feared fireworks. Markets were breathing a sigh of relief.<\/p>\n

Labored breathing returned Thursday. Ten-year Treasury yields spiked another 10 bps, trading above 1.75% for the first time since January 2020. And after trading as low as 0.76% during Powell\u2019s press conference, five-year Treasury yields spiked to almost 0.90% in increasingly disorderly Thursday trading. The Nasdaq100 was slammed 3.1%, with the S&P500 sinking 1.5%.<\/p>\n

The Treasury market would really like to take comfort from the Fed\u2019s steadfast dovishness. It\u2019s just been fundamental to so much. It\u2019s worked incredibly well for so long. Not now. This raises a critical issue: Paradigm shift? Regime change? What\u2019s driving Treasury yields these days? What is the bond market fearing? If it\u2019s inflation, is Fed dovishness friend or foe?<\/p><\/div>\n

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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n

credit bubble bulletin, doug noland, inflation, price inflation, fed, us federal reserve, jerome powell<\/div>\n","protected":false},"excerpt":{"rendered":"

Weekly Commentary: Powell on Inflation The Treasury yield spike runs unabated. Ten-year Treasury yields rose another 10 bps this week to 1.72%, the high since January 23, 2020. The Treasury five-year \u201cbreakeven\u201d inflation rate rose to 2.65% in Tuesday trading, the high since July 2008. The Philadelphia Fed\u2019s Business Survey Prices Paid Index surged to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7756,16861,303,426,16888,13351,3650],"class_list":["post-57246","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit-bubble-bulletin","tag-doug-noland","tag-fed","tag-inflation","tag-jerome-powell","tag-price-inflation","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57246","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=57246"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57246\/revisions"}],"predecessor-version":[{"id":57247,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57246\/revisions\/57247"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57246"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57246"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}