Powell's Hawkish Pivot: Rate Cut Expectations Plummet, U.S. Treasuries Sold Off, Yields Surge
BlockBeats News, March 19th, Federal Reserve Chairman Powell's latest "hawkish" stance dealt a heavy blow to the market's expectations. After staying put for the second time in a row, Powell clearly stated that the Fed would not cut interest rates until a significant drop in inflation is observed, shattering market fantasies. As a result, U.S. Treasuries experienced a sell-off:
The 2-year Treasury yield rose to around 3.78%, hitting a 7-month high;
The 10-year yield rose to 4.27%.
Interest rate market expectations cooled rapidly, with the probability of a rate cut once this year now close to a "coin toss," and even discussions of raising rates again.
Analysts believe that the Middle East conflict has driven up oil prices, exacerbating inflationary pressures and prompting the Fed to adopt a more cautious stance. The market's earlier bets on multiple rate cuts have been largely reversed, leading to significant bond market volatility.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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