Treasuries trade higher as Powell cites fall in rates

Friday, 23. August 2019 16:27

Prices of United States government debt swung to gains on Friday, sending yields back lower, after Federal Reserve Chairman Jerome Powell attempted to assure investors and the public that policymakers would "act as appropriate to sustain expansion." He stressed the challenge is how the central bank would be fulfilling its mandate with interest rates holding near zero. Wall Street pared a part of losses but gold and silver jumped in a bout of risk aversion.

On the flipside, in an apparent attempt to discourage bets on a strong easing trajectory, he claimed the domestic economy is still in "well overall" and pointed to historical episodes of Fed's temporary rate cuts before the return to lifting borrowing costs.

The two-year US yield lost a stunning five points to 1.572% at 10:25 am ET. The spread remained tight against the ten-year rate, which declined 3.2 points to 1.585%. The yield on 30-year sovereign bonds plunged 2.6 points to 2.08% after initially holding near the flat line. Corresponding futures advanced 0.07%, 0.2% and 0.19%, respectively.

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