Expectations that the global economy has dodged the worst-case coronavirus pandemic scenarios have led to a dramatic sell-off in U.S. government bonds from their record highs, pushing the yield curve to its steepest level since March.
Investors will get a chance next week to see whether the U.S. Federal Reserve agrees with their optimism. The U.S. central bank’s two-day meeting, ending on Wednesday, will be the first since April when Fed Chair Jerome Powell said the U.S. economy could feel the weight of the economic shutdown for more than a year.
While the Fed could introduce additional bond-buying programs known as quantitative easing or yield-curve control measures to target short-term rates, fund managers say they expect yields will need to rise significantly to justify any intervention in the bulk of the curve. Instead, they are watching for hints that the central bank believes the worst part of the coronavirus crisis has passed.
“The Fed will be OK with a slow creep higher, particularly with a backdrop of a recovery, but if it moves too much and destabilizes the recovery, there’s a reason for concern,” he said. The manufacturing ISM index rose to 43.1 in May from 41.5 in April, while weekly jobless claims fell to 1.877 million from 2.126 million the week before.
FILE PHOTO: Pedestrians walk past the New York Stock Exchange as the building opens for the first time since March while the outbreak of the coronavirus disease continues in the Manhattan borough of New York, U.S., May 26, 2020. REUTERS/Lucas Jackson
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Wall Street halts massive student-loan relief deal in courtAn agreement between U.S. regulators and a money manager that could have brought student-debt relief to hundreds of thousands of borrowers has been rejected by a judge.
Read more »
Warner Music Group Trading On Wall Street, Promises Social Justice SupportA day after “Blackout Tuesday,” Warner Music Group announced a $100 million fund intended to support causes related to social justice and campaigns against violence and racism.
Read more »
A $9 Billion Wall Street Heavyweight Talks Racism And How To Build A Better Society“This nation is the United States,” says Tracy Maitland, head of one of Wall Street's largest minority-owned investment firms, 'If we are going to be united, everyone has to have equal access and full and fair consideration.”
Read more »
Cinemark Wins Points From Wall Street Analysts For Theater Reopening PlanThree Wall Street analysts offered positive sentiments Thursday about the prospects for Cinemark, the No. 3 U.S. exhibitor, after it outlined plans to reopen movie theaters in the midst of the COVID-19 pandemic
Read more »
Warner Hits Wall Street: Six Reasons Why WMG's IPO Matters (Or Doesn't)Warner Music Group&39;s IPO, delayed by the coronavirus pandemic and overshadowed by nationwide protests, made a big splash on the Nasdaq stock exchange on Wednesday, rising over 20% from the IPO price and giving music a brief spotlight on Wall Street.
Read more »
Wall Street ends four-day rally in advance of May jobs reportWall Street retreated on Thursday as investors hit the pause button in advance of Friday's jobs report, capping a four-day rally driven by rising economic sentiment.
Read more »