Lates News

Castle Securities stated that after a prolonged period of inflation above target levels, the Federal Reserve remains reluctant to tighten monetary policy, resulting in long-term bond yields staying at multi-year highs and posing broader risks to the overall market. Nosh de Sha, head of fixed income sales for Europe, the Middle East, and Africa at Castle Securities, noted that despite policy rates being 175 basis points lower than their peak, long-term U.S. treasury yields are still at their highest levels in nearly 20 years. De Sha remarked, In my view, this reflects the market's belief that both the Fed and the fiscal authority tend to choose the easier path when policymakers face tough choices. As long as this situation continues, it will keep posing risks to the entire market. On Monday, the yield on 30-year U.S. treasuries climbed to a 19-year high, surpassing 5.28%. Data released last week indicated a slowdown in both inflation and consumer demand, prompting the bond market to lower its expectations for a Fed rate cut in September. De Sha warned that the recent improvement in inflation and the weakening job market should not be interpreted as a sign that interest rate risks have been alleviated. He pointed out that over 55% of core commodity prices are still rising. Therefore, he believes that the Fed's policy meeting next month will be a tie match.