NAB – The Morning Call · Bond yields are at it again

Powell gives no answers, bond yields climb again

Friday 5th March 2021

Bond yields are on the rise, in the US and in Australia – for very similar reasons. Jerome Powell failed to reassure markets that the Fed had a plan to cope with rising yields. As NAB’s David de Garis explains, the Fed governor was saying the Fed had the tools to use if conditionals materially changed, just as conditions were materially changing! In Australia markets were clearly hoping for more bond buying from the RBA, so when they went returned to their previous buying level, markets were disappointed and bond yields rose again. All of this, of course, driven by inflation fears, for which a spike in oil prices hasn’t helped help. The timing couldn’t have been worse from OPEC+, who failed to agree on easing production cuts. Tonight we get non-farm payrolls numbers in the US and China’s National People’s Congress is on over the weekend. There’s a bit going on.

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