US bond yield slide hits dollar

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The US bond yield is imposing pressure on the dollar, as investors bet that the federal reserve that slows down economic growth will force the Federal Reserve to cut interest rates despite endless inflation.

Tuesday 10 years of treasury yields declined at 4.32 percent, which is the lowest level from mid -December. The reduction from above 1.5 percent of the last month has been encouraged by the worse outlook for our growth, after that Data string The weak consumer and the feeling of the business showed.

It has hurt DollarWhich is now reduced by 1.5 percent against a basket of their peers this year, surprising the expectations that Donald Trump returned to the White House to increase the coin. The dollar has earlier strengthened the bet that the new president’s tariffs and immigration carbus inflation can prevent the federation from cutting the Fed.

“Slow growth and high inflation expectations are a more negative mixture for the US dollar,” said Lee Hardman, senior currency analyst of the banking group MUFG.

Investors say the fall of the real Treasury The yields were a particularly important driver of the coin representing the return after the inflation was taken into consideration.

The yield of the 10-year-old Treasury inflation-protected securities (TIPS) on Tuesday stood at 1.9 percent, it was down to the lowest from December to the lowest and 2.3 percent last month.

Continuous inflation stresses the Fed a binding, as it naturally responds to its rate-cut cycle by slowing or even increasing the signal rate. However, the flagged growth – and the broadsides repeatedly from Trump claims Fed Chair Jay Powell as the cost of taking a lower orrow – on the other hand.

Trump initially Compatible It was a rate last month after the Fed, but later said it was “the right thing to do”.

JP Morgan analysts highlighted a note last week [due] Fed policy in the face of intense tariff-induced enthusiasm in the inflation of the front edge.

Investors have raised expectations as the price of investors for the possible impact of Trump’s tariff. Investors’ best estimates about where the so-called two-year break-ensees measure the difference between actual yields and nominal yields-the best estimate of investors has reached their highest in early 2021 last week.

US inflation unexpectedly increased by 3 percent in January and the latest fed minutes To warn about “risk of vomiting” For inflation. Consumers expect long -term prices to their highest since 1995.

Nevertheless, investors are betting that the Fed will reduce half -percent points at the end of the year.

Fund directors say the market threatens domestic growth from the new president, as well as other policies, such as immigration crackdown and other policies in the public sector, and other policies.

The nominal US Treasury yield has dropped sharply from their top in mid -January.

Matthew Morgan, the chief income of Jupiter, said, “Markets we have seen our exceptionalism at the top,” Uncertainty about the path of financial policy, as well as tariffs, government cuts and other fields may mean less investment, recruitment, appointment. ” And increase ”.

In addition to poor dollars and lower yields, he said, “The next question will be to re -construct the risk to the risk of US growth.” After hitting a series of record height, stocks have lost ground in recent sessions.

An S&P survey published last week found that the US service sector had signed a contract for more than two years for the first time.

UBS analysts said earlier this month that the actual yield was reduced, when the expectations of inflation remained high, reflect a “stagnation trend” from the tariff.