Fed’s Bostic
- Open to starting rate cut before July if there is convincing evidence inflation is is long faster than he anticipates
- Repeat baseline is for rate reductions starting in Q3, with care needed not to cut Toussaint and risk renewed demand and price pressures
- size possibility conflicts around the world. Again complicate supply chains, risk that US budget fights and elections could affect the economy, and the financial markets
- Gven uncertainty, unwise for event to mark in any approach at this point
Bostic has been more hawkish. Policy is a voting member on the 2024 FOMC Board. The market – despite the back up in yields recently – is still pushing for a cut sooner than the summer.
US stocks had dipped a bit:
- S&P index is now up 10.27 points or 0.21% at 4749.23
- NASDAQ index is up 118 points or 0.79% at 14972
US yields are higher with the longer end up more than the shorter end.
- 2 year yield 4.369% +1.5 basis points
- 10 year yield 4.149% +4.6 basis point
- 30-year yield 4.378% +6.6 basis points
The 2-30 year yield value is back into positive territory at 0.9 basis points. The 2-10 year spread is higher but still negative at -22 basis. point.