A recent rise in US bond yields and market inflation expectations have bolstered Federal Reserve officials’ hopes the central bank’s new monetary policy approach is taking hold and could be further buoyed if a Democratic-led Congress rolls out more spending.

“I am encouraged to see the rise in market indicators of inflation expectations. ... That is what we are trying to support,” Richmond Federal President Thomas Barkin said on Thursday in an interview with Reuters.

Barkin said he regarded a recent rise in interest rates on Treasury bonds as also part of a “reflation trade,” a sign that investors were factoring future hikes in prices into their decisions by demanding higher interest rates, rather than representing a worrisome tightening of financial conditions. (RTRS - Continue Reading)

Joe Biden is considering asking Congress to help suffering Americans in two steps: give them the balance of their coveted $2,000 coronavirus payments, followed by a $3 trillion tax and infrastructure package.

Biden is confident he can get multiple packages through Congress after Democrats won both Georgia Senate elections. The president-elect's team also wants to get cash in Americans' hands as quickly as possible, according to people familiar with the matter.

In July Biden rolled out his Build Back Better plan, which includes billions of dollars for caregivers, incentives for manufacturers and some $4 trillion for green jobs and infrastructure spending. (Axios - Continue Reading)

December’s job growth likely slowed dramatically from November’s pace and could even be negative, as businesses and consumers responded to the spreading coronavirus.

Economists expect 50,000 jobs were added in December, slightly more than a fifth of the 245,000 in November, according to Dow Jones. The unemployment rate is expected to rise slightly to 6.8% from 6.7%.

“I think it’s 50/50 whether it’s going to be up 50,000 or down 50,000. We’re kind of on the knife’s edge between creating additional jobs and the recovery falling back a step,” said Chris Rupkey, chief financial economist at MUFG Union Bank. (CNBC - Continue Reading)

The dollar’s weakening trend will last at least another year, longer than previously expected, according to a majority of foreign exchange strategists polled by Reuters who cited a hunt for yields in emerging market currencies as the main reason.

The dollar’s weakening trend will last at least another year, longer than previously expected, according to a majority of foreign exchange strategists polled by Reuters who cited a hunt for yields in emerging market currencies as the main reason.

The greenback has been pushed to multi-year lows by rock-bottom US interest rates, massive budget and trade deficits, and expectations that rebounding world trade after a successful coronavirus vaccine rollout would drive non-dollar currencies higher. (RTRS - Continue Reading)