Markets: Will Powell be the next peak of balance?

After the agreement of the Federal Reserve Governor, Jerome Powell, at his hearing in the Senate on a strong US economy and able to support a further rise in interest rates , [19659002] (today he will be in the House of Representatives for the presentation of the Monetary Policy Report), l and the Stock Exchange experienced a typical injection of confidence that did not concern Piazza Affari, the only sign less at 13 (-0.09% with 21,958 points).

The American Factor

The focus is on the prospects of the US economy, prospects for strength in the labor market (obviously still on the American horizon) and a trend inflationary encouraging, according to Powell himself. Many, however, have long begun to look with fear at the notorious yield curve as a possible warning of an upcoming recession: in particular, US ten-year bond yields are dangerously close to those of both years which has always marked the beginning of a crisis and the perception by investors of short-term dangers. Well, even in this case, Powell wanted to rebadure on the phenomenon, that he felt quite normal since the Fed considered Fed Fund forecasts above 3% by 2020, which, with a natural rate of 2.9%, a consequent flattening of the curve in parallel with the appreciation of market rises.

Analysts are worried however that the market is not realizing what could happen next year with a series of increases that could reach 4 (each of 25 basis points) for Rbc against the consensus alone would give for sure. On the basis of this, however, the next publication (tonight Italian h.20) of the Beige Book which for the experts would be the definitive confirmation of the good economic health of Washington but also fears related to the war of duties.