Dysfunctional Credit Markets – Still Waiting On The Fed

Dysfunctional Credit Markets – Still Waiting On The Fed

Share to Linkedin WASHINGTON, DC - DECEMBER 06: Federal Reserve Board Chairman Jerome Powell speaks during a Rural ... [+] Housing Assistance Council Awards Reception, on December 6, 2018 in Washington, DC. (Photo by Mark Wilson/Getty Images) As the week ended, U. S. credit markets appeared confused, if not outright dysfunctional. The 10-Year Treasury yield began February at 1. 09% and reached an interim peak of 1. 54% on February 25. Then it retreated to 1. 42% as markets thought the rise had simply been overdone. But Fed Chair Powell's refusal to assure financial markets regarding the Fed's intentions at the Wall Street Journal's Jobs Summit (as detailed in last week's blog) caused the 10-Year to spike again to 1. 56% on Friday, March 5. Markets were steady most of last week as the RBA (Reserve Bank of Australia) and ECB (European Central Bank) announced new easing programs. But, on Friday (March 12), the 10-Year yield spiked again, this time by nearly 10 basis points (0. 1 percentage points) to 1. 625%. And, once again, the Fed was MIA. It could be that the Fed is simply in its quiet period as the Federal Open Market Committee (FOMC) is scheduled