Some not so dovish Fed comments and yields are creep, creep, creeping higher….
Standard Chartered writes (our emphasis):
The UST curve bearish steepened significantly with the 10Y yield approaching five-month highs after the Fed was less dovish than expected. To highlight, the Fed kept its FFTR at 0-0.25%, as expected. However, it noted that “the pace of contraction appears to be somewhat slower” and “household spending has shown signs of stabilising.”
Meanwhile, on the matter of Fed buybacks — which are failing to keep yields down:Moreover, the Fed maintained its target to purchase USD 300bn of USTs, which disappointed some players who were expecting this to be expanded. However, the Fed added that it will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.
So maybe some more buybacks at some point. For the time being, however, probably not.
Related links:
Fed leaves funds rate unchanged, expects continued subdued inflation - FT Alphaville
To twist a Treasury – FT Alphaville
Tide turning for treasuries – FT Alphaville
The perfect storm – FT Alphaville
Rising bond yields present fresh Fed challenge – FT.com