Dovish Fed comments are tugging yields and the dollar lower
Dovish Fed comments are tugging yields and the dollar lower, while are supporting Wall Street. The move is still marginal, though as the markets have largely been pricing in a Fed pause this year. The 2-year has dipped to 2.584% from 2.595%. The wi 10-year is flat at 2.735% versus 2.745% earlier. The dollar index has slumped to 95.35 from 95.92. And the Dow tested 23,982 before sagging a bit. The markets maybe over doing that outlook though. Remember that while Bullard and Evans are both voters, they are also two of the most dovish on the FOMC, along with Bostic. And Evans added he's still forecasting a 3% handle on the funds rate. While growth momentum may be sagging, with headline inflation softening, analysts suspect growth could be solid enough to warrant another rate increase at the March 19, 20 FOMC. The key could be inflation, however, and if there are no signs of upward pressures, the Fed might pause for the quarter. There's a lot more Fedspeak due this week too, including Powell speech at the Economic Club of Washington tomorrow.