It's showtime for Jerome Powell. His speech at Jackson Hole — set for 10 a.m. ET — has investors in Asia and Europe canceling their Friday night pub crawl and pushing back weekend plans.
Bottom-line: 파월의 8분 간 연설로 빌리어네어들의 자산 780억 달러가 증발함.
Powell’s 8-Minute Speech Erases $78 Billion From Richest Americans. In the span of just eight minutes, Federal Reserve Chair Jerome Powell sparked a market rout that slashed the fortunes of America’s richest people by $78 billion. Elon Musk’s saw $5.5 billion erased from his wealth. Jeff Bezos lost $6.8 billion, the most of anyone on the Bloomberg Billionaires Index. The fortunes of Bill Gates and Warren Buffett declined by $2.2 billion and $2.7 billion, respectively, while Sergey Brin’s was knocked below $100 billion. Powell used his speech at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming, to reiterate that the US central bank will keep raising interest rates and probably leave them elevated for a while to reduce inflation. He was seen as pushing back on a recent rally in US stocks that was fueled by speculation that policy makers would soon reverse course from their aggressive monetary tightening. The S&P 500 tumbled 3.4%, its worst day since mid-June. The tech-heavy Nasdaq 100, which counts Microsoft Corp., Amazon.com Inc., Tesla Inc. and Alphabet Inc. among its biggest components, plunged more than 4%.
Powell’s 8-Minute Speech Erases $78 Billion From Richest Americans. In the span of just eight minutes, Federal Reserve Chair Jerome Powell sparked a market rout that slashed the fortunes of America’s richest people by $78 billion. Elon Musk’s saw $5.5 billion erased from his wealth. Jeff Bezos lost $6.8 billion, the most of anyone on the Bloomberg Billionaires Index. The fortunes of Bill Gates and Warren Buffett declined by $2.2 billion and $2.7 billion, respectively, while Sergey Brin’s was knocked below $100 billion. Powell used his speech at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming, to reiterate that the US central bank will keep raising interest rates and probably leave them elevated for a while to reduce inflation. He was seen as pushing back on a recent rally in US stocks that was fueled by speculation that policy makers would soon reverse course from their aggressive monetary tightening. The S&P 500 tumbled 3.4%, its worst day since mid-June. The tech-heavy Nasdaq 100, which counts Microsoft Corp., Amazon.com Inc., Tesla Inc. and Alphabet Inc. among its biggest components, plunged more than 4%.
Bottom-line: 유명지로 여행을 떠나기엔 항공편이 부족해지면서 부유한 사람들의 개인 항공기 이용이란 방법으로 항공난을 스스로 해결하며 각 공항별 민간 항공편이 급증하고 있음.
Private Jets to Ibiza, Paris Surge as Rich Evade Travel Chaos. As Europe grapples with a summer of travel chaos, the wealthiest are increasingly taking matters into their own hands. Private-jet use has surged by almost a third in recent months compared to pre-pandemic levels, stretching airport capacity from Ibiza to Mykonos and stoking a political backlash in France. London logged the most private flights -- more than 12,000 in July -- while Naples, Amsterdam and Berlin saw the biggest increases in private traffic among the most popular airports from 2019 levels, according to data compiled by the European Business Aviation Association. The surge comes as Europeans, eager to travel as Covid restrictions were lifted, flocked to airlines that have struggled to add back staff they shed during the pandemic. British Airways Plc, Deutsche Lufthansa AG and other major carriers have cancelled tens of thousands of intra-European flights this summer amid the worker shortage.
Private Jets to Ibiza, Paris Surge as Rich Evade Travel Chaos. As Europe grapples with a summer of travel chaos, the wealthiest are increasingly taking matters into their own hands. Private-jet use has surged by almost a third in recent months compared to pre-pandemic levels, stretching airport capacity from Ibiza to Mykonos and stoking a political backlash in France. London logged the most private flights -- more than 12,000 in July -- while Naples, Amsterdam and Berlin saw the biggest increases in private traffic among the most popular airports from 2019 levels, according to data compiled by the European Business Aviation Association. The surge comes as Europeans, eager to travel as Covid restrictions were lifted, flocked to airlines that have struggled to add back staff they shed during the pandemic. British Airways Plc, Deutsche Lufthansa AG and other major carriers have cancelled tens of thousands of intra-European flights this summer amid the worker shortage.
Bottom-line: Korean Fans
Elon Musk’s Many Korean Fans Have Built a $15 Billion Tesla Stake. Individual Koreans held about 1.6% of the company’s equity as of Aug. 17, according to calculations by Bloomberg News based on data from Korea’s central securities depository. That’s more than their combined investments in Alphabet, Apple, Microsoft, and Nvidia, the data show. There are no official figures on the total holdings of US retail traders in Tesla, which is assumed to be larger given the bigger pool of investors in its home market. Giacomo Pierantoni, head of data at Singapore-based Vanda Research, estimates that individuals globally, excluding Musk and Ellison, own about 15% of the company.
Elon Musk’s Many Korean Fans Have Built a $15 Billion Tesla Stake. Individual Koreans held about 1.6% of the company’s equity as of Aug. 17, according to calculations by Bloomberg News based on data from Korea’s central securities depository. That’s more than their combined investments in Alphabet, Apple, Microsoft, and Nvidia, the data show. There are no official figures on the total holdings of US retail traders in Tesla, which is assumed to be larger given the bigger pool of investors in its home market. Giacomo Pierantoni, head of data at Singapore-based Vanda Research, estimates that individuals globally, excluding Musk and Ellison, own about 15% of the company.
Bottom-line: 싱가폴에서 15년만에 열린 소더비의 경매에서 1,750만 달러 규모의 작품이 팔렸고, 절반 가까운 작품이 가장 높은 견적보다 비싸게 낙찰됨. 전년도 싱가폴의 수집가들은 미술품과 시계 등을 전세계에서 수집했는데, 특히 서로 비교되는 홍콩에 대한 중국의 간섭이 심해지며 싱가폴이 부유한 사람들의 안전한 항구 역할을 하고 있음.
Sotheby’s said it sold art works worth nearly S$24.5 million ($17.5 million) in its first auction in Singapore in 15 years, beating a pre-sale estimate of about S$18 million. Nearly half of the works in the sale achieved prices over their high estimates, the auction house said in a statement after proceedings. Walter Spies’s Tierfabel (Animal Fable) sold for just over S$4 million, while a Willem Gerard Hofker composition went for about S$2.3 million and nearly double its high estimate, it said. The auction’s success marks an important milestone in the city-state’s positioning as Asia’s next key art hub amid a growing collector base. Singapore has become a safe harbor for some of the region’s wealthiest in recent years with rival Hong Kong losing appeal due to China’s increasing grip on the former British colony. Last year, Singaporean collectors were particularly active globally across categories including modern Asian art and watches, according to Sotheby’s.
Sotheby’s said it sold art works worth nearly S$24.5 million ($17.5 million) in its first auction in Singapore in 15 years, beating a pre-sale estimate of about S$18 million. Nearly half of the works in the sale achieved prices over their high estimates, the auction house said in a statement after proceedings. Walter Spies’s Tierfabel (Animal Fable) sold for just over S$4 million, while a Willem Gerard Hofker composition went for about S$2.3 million and nearly double its high estimate, it said. The auction’s success marks an important milestone in the city-state’s positioning as Asia’s next key art hub amid a growing collector base. Singapore has become a safe harbor for some of the region’s wealthiest in recent years with rival Hong Kong losing appeal due to China’s increasing grip on the former British colony. Last year, Singaporean collectors were particularly active globally across categories including modern Asian art and watches, according to Sotheby’s.
Bottom-line: 한국 중앙은행은 미국보다 앞서 긴축을 중단하지 않을 것이며, 미국 중앙은행이 설정하는 정책금리보다 약간 모자르게 계속 따를 것이라 함.
Bank of Korea Won’t Stop Tightening Before Fed, Rhee Says. South Korea’s central bank suggested it may raise interest rates again to tame inflation as the US Federal Reserve also pledged to combat higher prices. Governor Rhee Chang-yong told Reuters in an interview Saturday that the Bank of Korea isn’t likely to halt its tightening measures before the US Federal Reserve. The comments were made during the Jackson Hole conference in Wyoming. Rhee said the Fed’s decision on further tightening would put pressure on the South Korean won to depreciate and added that he was ready to intervene to stabilize the currency. In Seoul, Prime Minister Han Duck-soo told Korean Broadcasting System in an interview Sunday he expects the degree and speed of interest rate increases to be “slightly less than that of the US.”. BOK Governor Rhee last week presided over a 25 basis point rate increase and hinted that the bank’s stance was to continue with hikes of this smaller size, spelling out his position on the pace of tightening to rein in prices and support the currency while keeping the economy ticking over.
Bank of Korea Won’t Stop Tightening Before Fed, Rhee Says. South Korea’s central bank suggested it may raise interest rates again to tame inflation as the US Federal Reserve also pledged to combat higher prices. Governor Rhee Chang-yong told Reuters in an interview Saturday that the Bank of Korea isn’t likely to halt its tightening measures before the US Federal Reserve. The comments were made during the Jackson Hole conference in Wyoming. Rhee said the Fed’s decision on further tightening would put pressure on the South Korean won to depreciate and added that he was ready to intervene to stabilize the currency. In Seoul, Prime Minister Han Duck-soo told Korean Broadcasting System in an interview Sunday he expects the degree and speed of interest rate increases to be “slightly less than that of the US.”. BOK Governor Rhee last week presided over a 25 basis point rate increase and hinted that the bank’s stance was to continue with hikes of this smaller size, spelling out his position on the pace of tightening to rein in prices and support the currency while keeping the economy ticking over.
Bottom-line: 투자자들은 잭슨홀에서의 연설을 통해 어쩌면 중앙은행의 최종금리가 4%가 아닌 5%에 가까울 수 있다는 생각을 가지게 됨. 이런 기대가 형성되면서 미국 국채 10년물 금리과 2년물 금리의 차이가 최대 -60bp까지 확대될 수도 있어보이며, 이는 닷컴 버블 시대의 -56bp를 다시 한 번 돌파하는 것임.
It’s possible the terminal rate is much higher than market pricing and what some Fed speakers telegraphed. That has some investors banking on more flattening of the yield curve, according to dealer desks. Bond traders found the pithiness of Fed Chair Jerome Powell’s speech Friday refreshing, and his hawkish message left some macro hedge funds and real money accounts projecting the Fed’s end point might be closer to 5% than 4%. Problem is Fed swaps price a ~3.81% terminal rate in 2023, up only a smidge from Thursday. Fedspeakers, for their part, also see a range of outcomes. Cleveland Fed President Loretta Mester favors hiking above 4% and holding, while St. Louis Fed’s James Bullard repeated his preference for 3.75%-4% by year end. And Atlanta’s Raphael Bostic finds favor with the 3.5% to 3.75% range. If 4.5% to 5% becomes the base case, the next destination on the 2s10s curve is to revisit the Dot.com bust levels of -56 bps on its way to breaching the current August low at -58 bps. Analysts at BMO Capital Markets believe all roads lead to -60 bps. And for 5s30s, given the indication of longer restrictive rate levels, -30 bps is the target for some investors.
It’s possible the terminal rate is much higher than market pricing and what some Fed speakers telegraphed. That has some investors banking on more flattening of the yield curve, according to dealer desks. Bond traders found the pithiness of Fed Chair Jerome Powell’s speech Friday refreshing, and his hawkish message left some macro hedge funds and real money accounts projecting the Fed’s end point might be closer to 5% than 4%. Problem is Fed swaps price a ~3.81% terminal rate in 2023, up only a smidge from Thursday. Fedspeakers, for their part, also see a range of outcomes. Cleveland Fed President Loretta Mester favors hiking above 4% and holding, while St. Louis Fed’s James Bullard repeated his preference for 3.75%-4% by year end. And Atlanta’s Raphael Bostic finds favor with the 3.5% to 3.75% range. If 4.5% to 5% becomes the base case, the next destination on the 2s10s curve is to revisit the Dot.com bust levels of -56 bps on its way to breaching the current August low at -58 bps. Analysts at BMO Capital Markets believe all roads lead to -60 bps. And for 5s30s, given the indication of longer restrictive rate levels, -30 bps is the target for some investors.
IB Report: 당사의 의견은 세 가지로 요약할 수 있는데, i) 여러 악조건에도 불구 올해 경기침체는 간신히 피할 것, ii) 인플레이션은 하락과 상승 부분의 상충으로 중앙은행이 만족할 수준에 도달하지 못할 것, iii) 중앙은행의 금리인상은 끝나지 않았다는 것임. 중앙은행의 추가적인 금리인상은 경기확장 국면을 조기에 끝낼 것으로 보임. (J.P.Morgan / When you go your way, and I go mine)
Our global outlook can be summarized in three easy pieces. First, the global expansion looks likely to skirt recession despite being buffeted by multiple adverse shocks during 1H22. Healthy private sector balance sheets provided a cushion that will be reinforced in 2H22 by fading supply-side drags and additional fiscal stimulus. Second, inflation is falling but not set to return to central bank comfort zones as rising labor costs and shifting inflation psychology will partially offset the fading of energy and pandemic-related price pressures. Finally, central banks have moved aggressively this year (policy rates outside China are up 156bp) but are not done. We expect further 125bp rate increases from the Fed, BoE, and ECB by year-end, based on the judgment that they belatedly recognize that the inflation process has changed in a manner that requires restrictive stances. Chair Powell expressed this view today at Jackson Hole, where he emphasized that “estimates of longer-run neutral rates are not a place to stop or pause” and that “restoring price stability will likely require maintaining a restrictive policy stance for some time to come.” The upshot of these views is that the price of skirting recession will be hawkish central banks, sluggish growth, and limited disinflation. A growing concern is that this environment convinces central banks that sluggish growth is not sufficient to bring inflation back to target and that their additional tightening becomes the catalyst for an early end to the expansion.
Our global outlook can be summarized in three easy pieces. First, the global expansion looks likely to skirt recession despite being buffeted by multiple adverse shocks during 1H22. Healthy private sector balance sheets provided a cushion that will be reinforced in 2H22 by fading supply-side drags and additional fiscal stimulus. Second, inflation is falling but not set to return to central bank comfort zones as rising labor costs and shifting inflation psychology will partially offset the fading of energy and pandemic-related price pressures. Finally, central banks have moved aggressively this year (policy rates outside China are up 156bp) but are not done. We expect further 125bp rate increases from the Fed, BoE, and ECB by year-end, based on the judgment that they belatedly recognize that the inflation process has changed in a manner that requires restrictive stances. Chair Powell expressed this view today at Jackson Hole, where he emphasized that “estimates of longer-run neutral rates are not a place to stop or pause” and that “restoring price stability will likely require maintaining a restrictive policy stance for some time to come.” The upshot of these views is that the price of skirting recession will be hawkish central banks, sluggish growth, and limited disinflation. A growing concern is that this environment convinces central banks that sluggish growth is not sufficient to bring inflation back to target and that their additional tightening becomes the catalyst for an early end to the expansion.
IB Report: 파월의 잭슨홀 연설은 언젠가 금리인상을 늦출 수 있지만 당분간 현재의 속도(9월 75bp)를 유지할 것이라며 균형적 메시지를 전달했음. 당사는 연말까지 3.25%~3.50%의 정책금리(9월 50bp, 나머지는 각각 25bp)를 예상하고 있지만, 단기 금리 및 최종 금리 모두 상방 위험이 더 높다고 생각함. (Goldman Sachs / Powell Argues for Restrictive Policy at Jackson Hole)
Chair Powell’s speech at the Fed’s Jackson Hole symposium reiterated that it will become appropriate to slow the pace of tightening “at some point,” as he laid out in his July press conference. However, Powell balanced that message by stressing that the FOMC remains committed to bringing inflation down, that the FOMC will likely need to maintain “a restrictive policy stance for some time,” and that progress on inflation “falls far short of what the Committee will need to see before we are confident that inflation is moving down.” We continue to expect the FOMC to slow the pace from here, delivering a 50bp hike in September and 25bp hikes in November and December, for a terminal rate of 3.25-3.5%. Additional CPI and employment reports will be available by the September meeting, however, and Powell said that another 75bp hike “could be appropriate.” We see the risks to both the near-term pace and our terminal rate forecast as tilted to the upside.
Chair Powell’s speech at the Fed’s Jackson Hole symposium reiterated that it will become appropriate to slow the pace of tightening “at some point,” as he laid out in his July press conference. However, Powell balanced that message by stressing that the FOMC remains committed to bringing inflation down, that the FOMC will likely need to maintain “a restrictive policy stance for some time,” and that progress on inflation “falls far short of what the Committee will need to see before we are confident that inflation is moving down.” We continue to expect the FOMC to slow the pace from here, delivering a 50bp hike in September and 25bp hikes in November and December, for a terminal rate of 3.25-3.5%. Additional CPI and employment reports will be available by the September meeting, however, and Powell said that another 75bp hike “could be appropriate.” We see the risks to both the near-term pace and our terminal rate forecast as tilted to the upside.
IB Report: 신용위험에 있어 탄광의 카나리아는 레버리지 론이라 할 수 있음. 1.4조 달러 규모의 이 대출은 2015년 대비 거의 두배에 달하며, 변동금리의 특성 상 소득감소와 금리인상 양쪽에서 어려움을 겪게 되어 있는데, 특히 과거 2008년 금융위기, 대확산 때와 다르게 경미한 수준의 침체에도 임계점에 도달하여 스프레드 확대가 급격해질 수 있을 것임. 결론적으로 고수익 채권과 대출 시장에서 카나리아의 울음소리가 들리고 있다는 것임. (Morgan Stanley / A New Recession Canary in the Credit Coal Mine)
The canary in today's credit coal mine could well be leveraged loans, a less "macro" but equally important part of the credit market. At US$1.4 trillion in outstanding volume, the loan market has nearly doubled in size since 2015, with a significant deterioration in quality. Due to the floating-rate nature of these instruments, underlying borrowers are particularly vulnerable to the double whammy of weaker earnings and rising interest rates. A downgrade wave is imminent, extending through the next few quarters. Historically, the loan index has breached 750bp in spread and an 85 cash price only in the depths of the GFC and Covid. This time around, we expect these levels to be tested even in a mild recession, signaling significant downside from current levels (480bp in spread; 95 cash price). Our conclusion: HY credit spreads may be less sensitive to a growth slowdown than in the past, but the loan market is fundamentally more vulnerable. Both canaries are singing for now. But given current valuations, we maintain a cautious stance across corporate credit – staying up in quality and up in seniority.
The canary in today's credit coal mine could well be leveraged loans, a less "macro" but equally important part of the credit market. At US$1.4 trillion in outstanding volume, the loan market has nearly doubled in size since 2015, with a significant deterioration in quality. Due to the floating-rate nature of these instruments, underlying borrowers are particularly vulnerable to the double whammy of weaker earnings and rising interest rates. A downgrade wave is imminent, extending through the next few quarters. Historically, the loan index has breached 750bp in spread and an 85 cash price only in the depths of the GFC and Covid. This time around, we expect these levels to be tested even in a mild recession, signaling significant downside from current levels (480bp in spread; 95 cash price). Our conclusion: HY credit spreads may be less sensitive to a growth slowdown than in the past, but the loan market is fundamentally more vulnerable. Both canaries are singing for now. But given current valuations, we maintain a cautious stance across corporate credit – staying up in quality and up in seniority.
Bottom-line: Dollar Enjoying Strong Follow-Through in Asia’s Morning.
Jackson Hole’s impact on the dollar is carrying through into Monday morning, weighing on key currencies in Asia. CNH has weakened through 6.90 against USD, an important intermediate step to 7.00. The latter would be a game-changer for local markets given the importance of trends for the yuan, and impact it would have on exchange-rate expectations. The PBOC might be moved to resist through a stronger-than-consensus official fixing rate.
Jackson Hole’s impact on the dollar is carrying through into Monday morning, weighing on key currencies in Asia. CNH has weakened through 6.90 against USD, an important intermediate step to 7.00. The latter would be a game-changer for local markets given the importance of trends for the yuan, and impact it would have on exchange-rate expectations. The PBOC might be moved to resist through a stronger-than-consensus official fixing rate.
Bottom-line: 레버리지 펀드들의 달러 순매도 포지션이 2021년 7월 이후 다시금 구축되었지만 달러지수는 +1.6% 상승함. 그 중 가장 큰 규모는 파운드 매수/달러 매도인데, 이 포지션들에서 항복이 나오면 달러를 더 높은 수준으로 끌어올릴 것임. 마침 달러는 중앙은행의 단호한 태도와 금리상승에서 피난처 수요로 힘을 받고도 있음.
Hedge funds may soon revert to dollar longs amid heightened haven bids for the US currency. Leveraged funds boosted bearish bets on the greenback to $458 million in the week ended Aug. 23 via futures based on CFTC data compiled by Bloomberg that cover eight currency pairs and the Dollar Index. This was the first time these funds held net dollar shorts since July 2021. The Bloomberg Dollar Spot Index climbed 1.6% during this period. The biggest dollar shorts were against the pound ($3.27 billion), which were partially offset by longs against the euro ($2.35 billion). As Cormac Mullen wrote last week, there’s everything but the kitchen sink for the Sterling bear case, including deterioration in the nation’s currency-account deficits, stagnant growth and double-digit inflation. That points to possible capitulation of these pound shorts, which could propel the dollar higher. That would dovetail with haven demand for the greenback as the market frets over an even more hawkish Fed and rising US yields.
Hedge funds may soon revert to dollar longs amid heightened haven bids for the US currency. Leveraged funds boosted bearish bets on the greenback to $458 million in the week ended Aug. 23 via futures based on CFTC data compiled by Bloomberg that cover eight currency pairs and the Dollar Index. This was the first time these funds held net dollar shorts since July 2021. The Bloomberg Dollar Spot Index climbed 1.6% during this period. The biggest dollar shorts were against the pound ($3.27 billion), which were partially offset by longs against the euro ($2.35 billion). As Cormac Mullen wrote last week, there’s everything but the kitchen sink for the Sterling bear case, including deterioration in the nation’s currency-account deficits, stagnant growth and double-digit inflation. That points to possible capitulation of these pound shorts, which could propel the dollar higher. That would dovetail with haven demand for the greenback as the market frets over an even more hawkish Fed and rising US yields.
Bottom-line: 잭슨홀 연설에서의 단호함에 따라 평가할 수 있는 한 가지는 현재 주식시장의 변동성이 지나치게 낮다는 것임. 최근 트레이더들은 낮은 변동성으로의 회귀에 베팅하면서 순매도 포지션을 2021년 3월 이후 최대 수준으로 늘렸는데, 잭슨홀 이후 이 포지션들은 해소될 여지가 커보임.
The first takeaway from the aftermath of the hawkish Jackson Hole symposium is equity volatility is just too low. The Cboe Volatility Index may have jumped almost four points as US stocks slumped Friday but it closed just below the 26 level, bang on its average for the year. On top of Jerome Powell’s confirmation that interest rates are going higher for longer -- to break the back of inflation -- there are further catalysts for price swings looming. They include the shutting of the key Nord Stream gas pipeline to Germany for maintenance, a ramp up of the Fed’s balance sheet rundown, crucial US labor data and a slew of central bank speakers Stateside and in Europe. And that’s just over the short term. Speculators have been busy betting against a return of volatility with net short positions on VIX futures at the biggest since March 2021, according to the latest CFTC data. The post-Jackson Hole environment suggests those bets need to be tempered.
The first takeaway from the aftermath of the hawkish Jackson Hole symposium is equity volatility is just too low. The Cboe Volatility Index may have jumped almost four points as US stocks slumped Friday but it closed just below the 26 level, bang on its average for the year. On top of Jerome Powell’s confirmation that interest rates are going higher for longer -- to break the back of inflation -- there are further catalysts for price swings looming. They include the shutting of the key Nord Stream gas pipeline to Germany for maintenance, a ramp up of the Fed’s balance sheet rundown, crucial US labor data and a slew of central bank speakers Stateside and in Europe. And that’s just over the short term. Speculators have been busy betting against a return of volatility with net short positions on VIX futures at the biggest since March 2021, according to the latest CFTC data. The post-Jackson Hole environment suggests those bets need to be tempered.
Bottom-line: 시장 참여자들은 잭슨홀에서 파월이 어느 정도 매파적 입장을 취할 것으로 예상했지만, 그는 예상보다 더 했음. 뿐만 아니라 유럽 또한 인플레이션 통제를 위해 높은 수준의 금리인상을 시사하며 미국 국채 2년물 금리는 2007년 11월 이후 최고 수준에 도달함. 하지만 분석가는 금리가 현재 수준에서 보다 더 상승할 여지가 있다고 봄.
Treasuries sold off in Asia as investors responded to global central bankers signaling they will increase interest rates as much as necessary to bring down inflation. The US two-year yield jumped to the highest level since November 2007 after Federal Reserve Chair Jerome Powell said at Jackson Hole a restrictive stance was likely to remain in place “for some time,” and “the historical record cautions strongly against prematurely loosening policy.” A top European Central Bank official said more tightening is needed even if Europe’s economy tips into recession. “Even though there was an expectation that Powell would be hawkish, he easily exceeded those expectations,” said Andrew Ticehurst, a rates strategist at Nomura Holdings Inc. in Sydney. “I was surprised US rates markets did not move more on Friday night. We retain our view for flatter curves following all the Jackson-Hole communication over the weekend.”
Treasuries sold off in Asia as investors responded to global central bankers signaling they will increase interest rates as much as necessary to bring down inflation. The US two-year yield jumped to the highest level since November 2007 after Federal Reserve Chair Jerome Powell said at Jackson Hole a restrictive stance was likely to remain in place “for some time,” and “the historical record cautions strongly against prematurely loosening policy.” A top European Central Bank official said more tightening is needed even if Europe’s economy tips into recession. “Even though there was an expectation that Powell would be hawkish, he easily exceeded those expectations,” said Andrew Ticehurst, a rates strategist at Nomura Holdings Inc. in Sydney. “I was surprised US rates markets did not move more on Friday night. We retain our view for flatter curves following all the Jackson-Hole communication over the weekend.”