The coming reduction in the Federal Reserve's bond purchases may bear little resemblance to the "automatic pilot" tapering exercise the U.S. central bank conducted seven years ago, as officials grapple with volatile data - on inflation in particular - during the rebound from the COVID-19 pandemic, a Fed official said on Friday. "In the 2013-2014 taper we went on automatic pilot and didn't do much," St. Louis Fed President James Bullard said in an interview on CNBC. "This time around, I mean look at this data," he said. "Look at how outsized all these numbers are and how volatile everything has been. I think we're going to have to be more state-contigent than we have been in the past."
U.S. senators haggle over funding of $1 trillion infrastructure compromise
A bipartisan infrastructure plan costing a little over $1 trillion, only about a fourth of what President Joe Biden initially proposed, has been gaining support in the U.S. Senate, but disputes continued on Sunday over how it should be funded. Biden told reporters last week that he will have a response to the plan as soon as Monday after reviewing it. Twenty-one of the 100 U.S. senators - including 11 Republicans, nine Democrats and one independent who caucuses with Democrats - are working on the framework to rebuild roads, bridges and other traditional infrastructure that sources said would cost $1.2 trillion over eight years. Biden had initially proposed about $4 trillion be spent on a broader definition of infrastructure, including fighting climate change and providing care for children and the elderly. But the White House trimmed the offer to about $1.7 trillion in talks with senators.
ECB makes good progress on new strategy, Lagarde says
European Central Bank policymakers meeting this weekend made "good progress" in reshaping the ECB's strategic goals, including the role it plays in fighting climate change and a revised approach to inflation, President Christine Lagarde said on Sunday. Lagarde gave no detail of the outcome of the talks, saying only that they covered the ECB's inflation goal and time horizon, links between
climate change and monetary policy and the modernization of central bank communications. The ECB's elusive inflation goal, currently set "below but close to 2%", seems almost certain to get a facelift and be set at 2%, with a tolerance for overshooting after periods of sluggish price growth.
Dollar holds near multi-month high after Fed's hawkish tilt
The 10-year government bond yield (interpolated) on the previous trading day was 1.86, -1.00 bps. The benchmark government bond yield (LB31DA, 10.5 years) was 1.83, -3.50 bps. LB31DA could be between 1.80-1.86. Meantime, the latest closed US 10-year bond yields was 1.47%, -7.00bps. USDTHB on the previous trading day closed around 31.43 Moving in a range from 31.45-31.56 this morning. USDTHB could be closed between 31.48-31.60 today. Meantime, The dollar held near multi-month peaks against other major currencies on Monday, after the U.S. Federal Reserve surprised markets last week by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
Sources : Bloomberg, CNBC, Investing, CEIC
