NEW YORK - Now that US Federal Reserve chairman Jerome Powell has made it crystal clear that interest rate cuts are coming in September, bond traders are focusing on bets over the size of that first reduction and the future path of easing.
Mr Powell, speaking on Aug 23 at the US central bank's annual symposium in Wyoming, said the "time has come" for the Fed to lower benchmark rates from their twodecade high, his clearest signal yet that long-awaited rate cuts are imminent.
While the Fed chairman gave no indication on the size of cuts or the path of easing, he noted progress on inflation and said central bankers will be keeping a close eye on the health of the labour market as a guide for where to take policy.
His words were enough to send US Treasury yields and the US dollar lower and stocks higher on Aug 23 as investors perceived a green light to take on risk.
"Markets need to digest this speech and remind themselves they and the Fed - are still data dependent," said Mr Jack McIntyre, portfolio manager at Brandywine Global Investment Management. Although Mr Powell struck a dovish tone, "now the data has to back it up".
As at Aug 23, the next big wagers on rate cuts were already coming into focus. Traders added to bets on a half-point of rate cuts in September. And the increasingly weak greenback was emerging as the currency of choice for a new wave of so-called carry trades involving risky bets made with borrowed money.
Esta historia es de la edición August 27, 2024 de The Straits Times.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición August 27, 2024 de The Straits Times.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
NUS team discovers way to rejuvenate eggs of older women
Researchers' breakthrough could boost success of assisted reproductive tech
US senator slammed for saying Muslim advocate supports extremism
Republican Senator John Kennedy accused a leading Muslim civil rights advocate of supporting extremism during a Senate hearing on hate incidents in the US, drawing criticism from many rights groups.
Canadian PM shows no sign of stepping down despite election loss
Doubts about the leadership of Canadian Prime Minister Justin Trudeau intensified after his ruling Liberal Party suffered a second humiliating loss in a special election, but the unpopular leader is determined to cling to office ahead of a looming national vote.
Golf – a refuge for US presidents but a headache for the Secret Service
Security risks abound on golf courses, with their wide-open spaces offering easy access
More women aged 50 and older having babies
The boundary of motherhood has shifted over the past few years as more women aged 50 and above are having babies.
Developers offered new incentives to use greener cooling solutions
Bonus floor space for those that build new district systems or tap existing ones
COE prices mostly higher; Open category premium hits $113,104
Certificate of entitlement (COE) premiums climbed across most categories on Sept 18, with the Open category recording the biggest rise to hit $113,104.
Turn phone or laptop into health screener with new software
A new software that analyses users' vital signs can turn any laptop or phone camera into a fullyfledged health screening device.
New Silkroutes ex-director gets jail for key role in market rigging
A former finance director of Singapore-listed New Silkroutes Group was sentenced to 12 weeks in prison on Sept 16 after pleading guilty to manipulating its share prices to allow its shares to be used as consideration for corporate deals.
Circle Line services hit again after fire in depot
Transport Correspondent For a second day, passengers on the Circle Line (CCL) had their journeys disrupted after several trains briefly lost power at about 8pm on Sept 18, stalling for about 15 minutes.