Ahead of Friday’s important US nonfarm payrolls data (this article was completed prior to the publication of these data), market attention this week was riveted on the speech of the head of the Federal Reserve System (FRS) Jerome Powell in the Senate. (Tuesday and Wednesday) as part of the presentation of the semi-annual report on monetary policy. To the surprise of the markets, the content of his statements was clearly more “aggressive” than at a press conference after the conclusion of the last monetary policy meeting on February 1, as he not only indicated that the key rate ceiling could rise to higher levels compared to with the bank’s estimates if the US data continues to surprise upwards but also leaves open the possibility of a reacceleration in the pace of interest rate hikes in the coming months (i.e. higher than the 25b session and was the slowest pace of rate hikes since March 2022 when the bank’s current tightening cycle began).

These statements, which express the bank’s serious concerns about inflation remaining above the target for a longer period than expected, as well as a re-acceleration of the monthly growth rate of the main consumer price index in January, most economic activity data came in stronger than expected in recent years. weeks, which temporarily led to further upward revisions to estimates of the US interest rate trajectory.

In particular, after Mr. Powell’s statements earlier this week, the futures market estimated the probability of a 50 basis point hike at the next meeting on March 22 at about 70%, but by the end it narrowed to 45%. a week after data showed a significant increase in new jobless claims last week, likely indicating some signs of easing conditions in the labor market.

Disappointing data on new jobless claims favored the US Treasury, which managed to cut losses after Mr. Powell’s speech.

* Department of financial analysis and research of international capital markets of Eurobank.