The US Dollar index (USDIDX) declines almost 0.3% today after approaching the psychologically significant 110 level. We can see, the 10-year treasury yields are still high today, losing only 1.5 p.p, at 4.79%
- Trump administration sources told yesterday about planning increasing US tariffs partially (2 to 5% monthly) to avoid inflation shock
- According to Reuters economic poll the US 10-year treasury yield will cross 5% this year, according to 24 of 36 bond strategists; however in a year it will fall to 4.3% vs 4.25% estimated in December
- This may suggest, that strategists expect disinflation to continue despite higher treasury yields; eventually higher yields and tight Fed policy will disrupt US economic growth and labour market, making Fed stance more dovish
- OIL declines 0.5% today, after US Secretary of State Blinken told that a Gaza ceasefire is right on the brink, while the US officials are waiting final word from Hamas.
Fed Schmid remarks
- The Fed's influence on housing supply is limited.
- There will be significant time lags in the impact of new administration policies.
- Regarding tariffs, the Fed will act if there is disruption to either of it's mandates.
USDIDX (M15 interval)
Source: xStation5
