FED Officials Set to Hold Rate as Yields Continue to Retreat

Philip Jefferson, vice chair of the Fed’s board and Lorie Logan, president of the Federal Reserve Bank of Dallas gave a statement on Monday, suggesting the US central bank might not raise the interest rate higher than the current 22-year high. The rate pushed up all costs of borrowing including credit cards, car loans, and mortgages, which hinder economic growth.


Jefferson said he would “remain cognizant” of the higher bond rates and “keep that in mind as I assess the future path of policy”, the rate hikes that Fed has imposed, have yet to hit the economy, “and that could influence what I think should happen next”, the Fed board said at the National Association for Business Economics on Monday.


Meanwhile, Logan earlier said “If long-term interest rates remain elevated, there may be less need to raise the fed funds rate”, the FED rate voter said at NABE.


On the other hand, Atlanta Federal Reserve Bank President Raphael Bostic said on Tuesday that, “I actually don’t think we need to increase rates anymore” to bring down inflation to 2%, as he sees no recession ahead amid the slow down economy from the hike, and “we might have to increase (the Fed policy rate), but that’s not my outlook right now, and that’s not my expectation”, Bostic commented on the current economic data.


Both comments pressured the 3-/6-month treasury auctions and 10-year treasury yield to fall on Tuesday, as both bonds and stocks market expected pause on rate hikes from the FED yet again. This might be one of the factors that pushed most Asia-Pacific markets on Wednesday morning after.