Investing.com – The bank will likely continue to flex its muscles against its peers as the recent explosive jump in Treasury yields could continue as Federal Reserve speakers are poised to reiterate the need for the Fed to remain cautious about cutting rates too early.
If last week’s situation continues, Fed speakers scheduled for this week “will sound combative as they try to put daylight between themselves and Jay Powell’s dovish tone on March 20,” Macquarie said in the note, adding There is room for dollar strength along with rising US bond yields ahead of Wednesday’s consumer inflation report.
“We forecast an increase in the overall consumer price index of 0.29%, which reflects rising prices for energy (+0.7%) and food products (+0.2%). headline,” Goldman Sachs said in a statement.
Fed speakers may point to the cost of an “early cut,” Macquarie said, but may also point to the possibility that the Fed’s estimates of the US neutral rate may have to be raised further.
Last week, Fed speakers sounded the alarm about cutting rates too soon, and Minneapolis Federal Reserve Bank President Neel Kashkari made headlines after floating the idea of not cutting rates this year if inflation continues to move sideways rather than down.
Kashkari, President Austan Goolsbee, New York Fed President John C. Williams, Atlanta Fed President Raphael Bostic, and Fed President Francisco Mary K. Daley are among the Fed speakers who will speak this week.
Fresh statements from Fed speakers should appear immediately after the latest data on consumer inflation, as well as the minutes of the March Fed meeting, are published on Wednesday.
Meanwhile, the euro could also face pressure from a more dovish European Central Bank. The ECB will meet on Thursday and some believe there is a chance, albeit small, of a rate cut.
“I think this week is really a live ECB meeting, although they’re probably going to cut rates first in June,” Jeff Yu of Bank of New York Mellon told Bloomberg.