“Since our September meeting, yields across the term structure have increased further, a sign that investors are reassessing the evolving macroeconomic landscape,” said Fed Vice Chair Philip Jefferson in prepared remarks Thursday afternoon.
“My colleagues and I will need to come to our own judgment, which may take more time,” he continued.
It’s the latest sign from the Fed that markets may have gotten ahead of themselves in assessing the pace of central bank rate hikes.
The odds of a Fed move at its Oct. 28 meeting have fallen to 30% from 70% earlier this week. And the odds of one or more rate hikes by year-end have dipped to 80% from 95% one week ago.
Bitcoin BTC$86,409.14 is moving up just a bit in U.S. afternoon action, now higher by 1% over the past 24 hours at $84,800.
Possibly helping the bid is a sharp decline in interest rates on Thursday, with the 10-year U.S. Treasury yield lower by 9.4 basis points to 5.217%. Earlier in the session, it had risen to 5.36%.
The 2-year Treasury note — because of its shorter duration, more closely tied to Fed policy — is down 12.3 basis points to 4.764% as traders pare bets on additional central bank rate hikes.
Economic news released today — jobless claims and the national PMI — gave zero signs that either the economy or price pressures were easing.
At work is likely 1) satiated bond shorts lightening up ahead of tomorrow’s key U.S. September employment report, and 2) rumblings of a budding European debt crisis as French bond spreads relative to German blow out to levels not seen since the last debt crisis more than a decade ago.
Citing a U.S. official, the Jerusalem Post is reporting that the Trump administration is sending a third aircraft carrier and an additional Marine unit to the Middle East.
Down earlier to below $89 per barrel, WTI crude oil is now higher by 2.5% to $92.63. Brent crude is up 3.6% to $101.53.
“It’s been a while since we had a European sovereign debt crisis,” wrote ZeroHedge on Thursday.
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