Dovish speeches by the Fed and ECB add momentum to the global central bank pivot, supporting cross asset performance.
The Fed started the global central bank pivot, in response to what Chairman Powell refers to as ‘crosscurrents’
in global trade and global growth, by first halting further increases in the Fed Funds rate and then adopting a ‘patient’ stance about future rate rises. However, the June policy statement dropped the phrase ‘patient’ and replaced it with‘…will closely monitor… and will act as appropriate to sustain the expansion’.
Markets began to price in several rate cuts, the US 10-year treasury yield fell through 2% and the US yield curve inverted around the 2yr maturity.Read the full article by Steven Keshishoghli