Powell Press Conference Rallies Bonds

Treasury bond prices are moving higher after the conclusion of today’s FOMC meeting brought no change in the Fed Funds rate nor much change in the description of monetary policy. During the post-meeting Q & A with Chairman Powell, he gave assurances that the central bank’s efforts to promote stable and sufficient levels of reserves would continue. Mr. Powell also cited the challenges that remain for trade relationships despite the beneficial impact that may result from the Phase One agreement with China.

While expressing optimism toward the likelihood of inflation rising to the desired level of 2%, he also recognized that the manufacturing sector remains mired to some degree in contraction. Also a topic was the effect that the coronavirus, and its potential to spread, might have on global economic activity. Mr. Powell thinks it’s too early to tell.

Meanwhile, the Ten-Year’s yield has dipped below 1.60% and the Two-Year is just above 1.40%.