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Asia markets set for declines after Powell comments


Oil settles slightly higher after sell-off this week

Oil settled slightly higher on Thursday but still hovered at three-months lows after a sell-off this week triggered by worries that demand is softening.

Brent crude contracts for January edged up 47 cents, or .59%, to $80.01 per barrel, while West Texas Intermediate contracts for December ticked up 41 cents, or .54%, to $75.74 a barrel.

Oil markets sold off this week on declining Chinese exports and forecasts that the U.S. will consume less crude this year, while fears of a broader Middle East war have abated.

— Spencer Kimball

Fed ‘not confident’ enough has been done to bring down inflation, Powell says

Fed Chair Jerome Powell said in a speech Thursday that the central bank thinks more may be needed to bring down inflation.

“The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance,” he said in his prepared speech.

Stocks moved to their lows of the day following Powell’s remarks.

— Jeff Cox, Fred Imbert

10-year Treasury yield rises after weak demand for bond auction

The 10-year U.S. Treasury yield jumped 11 basis points to 4.622% after the 30-year bond auction saw weak demand. The 2-year Treasury yield added roughly 4 basis points to 4.98%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

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10-year U.S. Treasury yield

Fed’s Bowman expects more hikes; Barkin counsels patience

Federal Reserve Governor Michelle Bowman said Thursday she still expects interest rates to rise but supported the decision earlier this month to hold.

“There is an unusually high level of uncertainty regarding the economy and my own economic outlook, especially considering recent surprises in the data, data revisions, and ongoing geopolitical risks,” Bowman said in prepared remarks for a speech to bankers in Florida. “Currently, the federal funds rate appears to be restrictive, and financial conditions have tightened since September,” she added.

Separately, Richmond Fed President Thomas Barkin said he expects “some sort of a slowdown” in the economy ahead but sees inflation as still too high. After 11 rate hikes totaling 5.25 percentage points, Fed officials are in a place where they can observe how policy impacts the economy and decide from there, he said.

“Whether a slowdown that settles inflation requires more from us remains to be seen, which is why I supported our decision to hold rates at our last meeting. With rates restrictive and financial conditions tightened, we have time to reconcile competing narratives on demand and to test different views on the trajectory of inflation,” Barkin said.

As a governor, Bowman is a voting member of the rate-setting Federal Open Market Committee. Barkin does not vote this year but will in 2024.

—Jeff Cox



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