Two-year U.S. Treasury yields rose after President Joe Biden tapped Jerome Powell to continue as Federal Reserve chair. Powell’s nomination was welcomed by many investors hoping for no big changes in the Fed as it guides the economy through a recovery from the pandemic.
The central bank is set to herald a return to pre-pandemic policy by end-2022. Futures contracts tied to the Fed’s policy rate indicated that money markets are now expecting the U.S. central bank to raise interest rates by 25 basis points by next June versus a previous estimate of July. A positive signal for the dollar!
