Odd Lots
Bond Traders Are Declaring the Death of Forward Guidance
Jerome Powell, chairman of the US Federal Reserve, departs following a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., US, on Wednesday, June 15, 2022.
Photographer: Al Drago/BloombergThis article is for subscribers only.
Thursday’s selloff in bond markets may be just a taste of what’s to come.
Bond yields are jumping again after the Federal Reserve hiked benchmark interest rates by 75 basis points — the biggest increase since 1994 — as it attempts to tamp down inflation that still sits at its highest level in four decades. The move came after Fed Chair Jerome Powell had effectively ruled out the possibility of a 75 basis point increase at the central bank’s meeting just last month.