Rollercoaster! ‘Roller-Coaster Ride’ in Bonds Puts Onus on Powell to Bring Calm

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by confoundedinterest17

Rollercoaster!

(Bloomberg) — Treasury traders are looking for Federal Reserve Chair Jerome Powell to provide some calm after a volatile few sessions that have sent yields on what one bank described as a “roller-coaster ride.”

Ten-year yields have swung in a 25-basis-point range in the past three sessions, having initially been thrown higher by the Fed’s comments that brought forward bets on interest-rate hikes. Monday’s trading encapsulated that volatility, with yields initially dropping to 1.35% before climbing to 1.50% by the session close — the largest gap since February. The 10-year rate has eased back to 1.485% in U.S. trading Tuesday

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Powell is set to testify to the U.S. Congress on the pandemic response and the economy. In written remarks prepared for the testimony, he said that inflation should move back toward the U.S. central bank’s 2% target once supply imbalances resolve. The key for traders will be whether he can rein in some of the current turbulence.

The face of calm.

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