Federal Reserve Chair Jerome Powell recently confirmed what the bond market had already anticipated. The morning saw bond yields rise to new multi-month highs without a clear reason, leading to speculation about a potential sell-off. Some attributed this to the upward revision of Industrial Production data, while others pointed to anxiety surrounding Powell’s afternoon speech. Powell’s remarks highlighted a lack of progress on inflation and raised doubts about a possible rate cut in 2024, although the market reaction was relatively subdued.
In terms of economic data, Housing Starts came in lower than forecast at 1.321 million compared to the previous 1.549 million, while Building Permits also fell short of expectations at 1.458 million versus the anticipated 1.514 million. Throughout the day, bond markets experienced fluctuations, with MBS down slightly and 10-year yields increasing.
Overall, Powell’s comments confirmed existing market sentiment, and traders seemed unfazed by the lack of surprises. For real-time updates and alerts on bond market movements, downloading the mobile app is recommended to stay informed on the latest developments.