The Fed says they are prepared to buy bonds. What does the market do? Sell!
I’m not really sure why, bit it looks as though they were expecting them to announce they’d be on the bid before the close of business today. One analyst surmises that the concerns in the statement from the FOMC on inflation falling too low will prompt the adoption of a an inflation target down the road and the bond market is not all that enamored of the idea. No matter what the cause, a move through 2.72% yields in 10s could see rates rise dramatically. Looks like the market is trying to bait the Fed into action.
EUR/USD has fallen to fresh session lows near 1.3110 on the firmer yields. A sustained break of the lows targets a pullback toward 1.2900 technically. Stops are clustered just below 1.3100, interbank dealers report.
