Bond market tightening complicates Powells task [View all]

[bronxiteforever]

January 31, 2018 / 4:46 PM / UPDATED AN HOUR AGO
Reuters
By Christopher Beddor

WASHINGTON (Reuters Breakingviews) - Bond market tightening will complicate Jerome Powell’s task. U.S. Treasury yields rose to near four-year highs even as the Federal Reserve left policy unchanged at Janet Yellen’s last meeting. But a fresh growth spurt and worsening deficit outlook will pose a serious challenge for her successor.

The recently passed U.S. tax cuts have helped alter the picture, putting the budget deficit on track to rise to nearly $1 trillion in 2019 and giving a fresh impetus to growth and potentially inflation...
Rising bond yields have a direct impact on the economy because they influence the rates companies pay to borrow and consumers pay on their mortgages. That may in part explain why both the S&P 500 Index and Dow Jones Industrial Average declined earlier this week and the CBOE Volatility Index jumped briefly above 15 for the first time in more than five months.

https://www.reuters.com/article/us-usa-fed-breakingviews/breakingviews-bond-market-tightening-complicates-powells-task-idUSKBN1FK36F

Now look we have a rising deficit! Nobody with an R next to their name mentioned it during the midnight rush job tax “reform”.