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(H2) Continues to Fade


Corrective Bounce


10Y Real Yields Close To Mar’21 Highs

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FED: April 30-May 1 FOMC minutes: Patient "For Some Time"
- FOMC members said that a patient approach to policy adjustment "would 
likely remain appropriate for some time" given moderate economic growth 
and muted inflation, even if global conditions improve.
- Many of the participants saw the recent soft measures of inflation as 
driven by "idiosyncratic" or transitory factors, particularly apparel and 
portfolio management, a sentiment echoed in Chair Powell's comments.
- A few participants felt that firmer policy may be needed if the 
economy evolves as expected, but a few others felt that resource 
utilization was not as high as data has suggested.
- Several were concerned about inflation expectations being anchored 
below 2% if inflation did not show signs of improvement.
- The staff suggested that the FOMC consider tweaking the overnight 
repurchase rate (ON RRP) before considering another IOER cut to mitigate 
risk of increased take-up at the ON RRP facility.
- A number of participants said risks and uncertainties had moderated 
and that financial market conditions had improved since the end of 2018. 
- They discussed the long-term portfolio options (short vs 
market-comparable), but came to no conclusion and said they would not 
need to decide for some time. They also expect to begin strategic 
framework discussion in second half 2019.
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