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Ex-Fed Economists On The US Inflation Outlook

DOVISH BAILEY COMMENTS FUEL RALLY

GILT SUMMARY

Gilts have rallied through the day with yields now down towards the day's lows and the curve bull flattening.

  • Speaking at Jackson Hole, BoE Governor Andrew Bailey has stressed that there remains considerable monetary ammunition to support the economy and that negative rates are part of the Bank's toolkit. The comments follow Fed Chair Powell's announcement yesterday that the FOMC will adopt an average inflation target.
  • Cash yields are 4-5bp lower on the day. Last yields: 2-year -0.065%, 5-year -0.0115%, 10-year 0.3087%, 30-year 0.8760%. The 2s10s spread is 2bp wider.
  • The short sterling futures strip has flattened with whites/reds up 0.5-1.0 ticks and greens/blues up 1.5-2.5 ticks.
  • The DMO earlier sold GBP2.25bn of 1-/3-/6-month T-bills.
  • The UK observes a national holiday on Monday.
MNI London Bureau | +44 0203-865-3808 | bruce.jeffery@marketnews.com