- Treasury yields decrease after Powell says that Fed can be patient and that politics remains appropriate.
- The DXY drops to 99.51 after reaching a maximum of 99.63; The dollar is under pressure due to the fall of yields.
- Powell warns that tariffs can hinder progress in Fed’s objectives, adding uncertainty about the trajectory of politics.
The US treasure yields fell throughout the curve, falling an average of two and a half to three basic points after having fallen more than seven basic points previously. However, when asked if the Federal Reserve (Fed) leans to one side of his dual mandate, President Jerome Powell declared that it is too early to predict.
10 -year performance falls to 4.27% after President Powell minimizes the urgency of the action
The 10 -year American treasure performance falls two and a half basic points to 4,271% at the time of writing, weighing on the dollar, which until now has retired from the maximum daily of 99.63, as indicated by the Dollar index American (DXY).
The DXY, which tracks the performance of the dollar value against a foreign exchange basket, is 99.51, with an increase of 0.12%.
President Jerome Powell said that Fed is not in a hurry and can be patient. He pointed out that current monetary policy is appropriate and that if things develop, “we can act quickly as appropriate.” Powell added: “We will not make progress in our goals this year if the tariffs remain.”
DAILY PERFORMANCE DAILY TO 10 YEARS FROM THE USA
Fed Faqs
The monetary policy of the United States is directed by the Federal Reserve (FED). The Fed has two mandates: to achieve prices stability and promote full employment. Its main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the objective of 2% set by the Federal Reserve, it rises interest rates, increasing the costs of loans throughout the economy. This translates into a strengthening of the US dollar (USD), since it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to foster indebtedness, which weighs on the green ticket.
The Federal Reserve (FED) celebrates eight meetings per year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve officials of the Federal Reserve: the seven members of the Council of Governors, the president of the Bank of the Federal Reserve of New York and four of the eleven presidents of the regional banks of the Reserve, who exercise their positions for a year in a rotary form.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non -standard policy measure used during crises or when inflation is extremely low. It was the weapon chosen by the Fed during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy high quality bonds of financial institutions. The one usually weakens the US dollar.
The quantitative hardening (QT) is the inverse process to the QE, for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the bonds that it has in portfolio that they expire, to buy new bonds. It is usually positive for the value of the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
