US Bond Yields Are At Their Peak Again

The US 10-year bond yield was the highest since January 2020, and the 30-year bond yield was the highest since August 2019.

Bond yields are at their peak again in the US. Strong dovish messages from the Federal Reserve bolstered the market demand for risky promises. In addition, while indices in the USA completed the decision day with a record, Asian stock markets participated in the rally in new transactions after the decision. The US 10-year bond yield tested the highest since January 2020. With the dovish stance of the Fed, a record was broken again in the American stock markets, while a rally was seen in the new transaction Asian indices. The MSCI Asia Pacific index experienced close to 1 percent. In Asia, Hong Kong Hang Seng and South Korean Kospi increased by about 1 percent. On the news of the Bank of Japan's yield curve target, the Japanese Topix appreciated close to 1 percent, with some of its earnings returned. A positive movement was observed in bond yields. The US 10-year bond yield saw more than 1.7 percent, testing the highest since January 2020. The US 30-year bond yield tested more than 2.5 percent, reaching the highest level since August 2019.  

Strong and Dovish Messages from the FED

Fed Chairman Jerome Powell made statements to the American economy at the press conference held after the interest rate decision. Powell pointed out that they do not see concrete evidence that the economy is fully recovered from the coronavirus epidemic and that they will not increase interest. The FED did not change the interest rate and kept it constant in the 0-0.25 percent band, Powell made a statement after the meeting, targeting inflation and their targets. Powell said, “You can assume we're there until we signal. We will give this signal as we get closer to the target. We are on a path where it is possible to achieve our goals to succeed in reducing asset intake ” Wrightson ICAP LLC Chief Economist Lou Crandall said the following on the subject: “Fed risks falling behind the curve. They don't think the risk is heavy. They believe it costs more to suppress the economy unnecessarily. According to the 'dot plot' chart showing individual estimates of the Fed members, 7 out of 18 members expect higher interest by the end of 2023. In December, five members expected higher interest rates by the end of 2023. Powell pointed out that the majority of the committee is projecting interest rates close to zero over the next three years. Powell said, before the rate hike, members will need to see "real improvement, not just the forecasts".