A period of high inflation in the United States may last longer than anticipated, two U.S. Federal Reserve officials said on Wednesday, prompting one to pull forward his views on when the central bank should start raising interest rates. Atlanta Fed President Raphael Bostic said with growth surging to an estimated 7% this year and inflation well above the Fed's 2% target, he now expects interest rates will need to rise in late 2022. Both Bostic and Fed Governor Michelle Bowman on Wednesday said that while they largely agree recent price increases will prove temporary, they also feel it may take longer than anticipated for them to fade. "Temporary is going to be a little longer than we expected initially ... Rather than it being two to three months it may be six to nine months," Bostic said.
Yellen says without debt limit hike, U.S. could face August default risk
U.S. Treasury Secretary Janet Yellen on Wednesday urged Congress to raise or suspend the federal debt limit as soon as possible, warning that if lawmakers fail to act, the United States could face a serious risk of default as soon as August. The Treasury in the
past has been able to stave off potential default for several months by employing extraordinary measures such as suspending
contributions to government employee pension funds, but spending on COVID-19 relief programs has added uncertainty to government cash flows. These measures could be exhausted in August, when Congress takes its traditional summer recess, she said.
Rising inflation puts Bank of England on the spot
The Bank of England will say on Thursday whether it is worried about a recent jump in inflation, which broke above the central bank's 2% target and looks set to climb higher as Britain reawakens its economy from its coronavirus slumber. The BoE is expected to leave its benchmark rate at an all-time low of 0.1% and press on with its 895 billion-pound ($1.25 trillion) bond-buying programme when it announces its June policy decision at 1100 GMT. But investors are watching to see if any other Monetary Policy Committee members join Chief Economist Andy Haldane who is likely to vote again to scale back the bond-buying programme at his final
meeting before leaving the BoE.
Dollar Up, Investors Digest Mixed Comments on Inflation from Fed Officials
The 10-year government bond yield (interpolated) on the previous trading day was 1.85, +0.00 bps. The benchmark government bond yield (LB31DA, 10.5 years) was 1.80, -3.00 bps. LB31DA could be between 1.77-1.83. Meantime, the latest closed US 10-year bond yields was 1.50%, +2.00bps. USDTHB on the previous trading day closed around 31.85 Moving in a range from 31.80-31.90 this morning. USDTHB could be closed between 31.85-31.95 today. Meantime, The dollar was up on Thursday morning in Asia as
investors digested mixed signals from U.S. Federal Reserve officials regarding the timeline of stimulus measures changes.
Sources : Bloomberg, CNBC, Investing, CEIC
