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Slowly, you should say something to the Fed
The inflation outlook in the US has strengthened markedly in recent weeks, with long-term yields rising in parallel. The ten-year benchmark yield is already above 1.5 percent, and we’ve long seen returns grow sharply on the market.
That’s why the market is looking forward to the Fed’s announcement Wednesday night, as many experts say the central bank needs to react to something. So far, it has been reported that the increase in inflation will be only temporary and that they will be flexible to deal with the associated risks. As early as last summer, the Fed announced its long-term goal of achieving 2% inflation, while they could tolerate a temporary glut.
In general, the US economy is improving, it is questionable if the central bank will respond to this. In recent days, there has been a growing expectation that the Fed may slowly slow down the pace of its asset purchases or even raise interest rates for the foreseeable future. These are fed, on the one hand, by the new economic stimulus package adopted last week and, on the other hand, by better-than-expected economic data, Commerzbank writes in its announcement.
What is the Fed doing in an increasingly hot market situation?
- Something needs to be said now about increasing returns
- The rise in interest rates could be a long way off
- You can also decide the fate of the dollar and the forint
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