Fed Chair ‘Powell’s curve’ plunges to new lows, flashing US recession warning – Reuters
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Reuters came out with downbeat signals from the Federal Reserve’s (Fed) research amid the ongoing recession chatters as Asian markets cheer the Good Friday holiday.
“The Federal Reserve’s preferred bond market signal of an upcoming recession has plunged to fresh lows, bolstering the case for those who believe the central bank will soon need to cut rates to revive economic activity,” said the news.
Reuters also adds that research from the Fed has argued that the “near-term forward spread” comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction.
The news allows the US Dollar to benefit from its haven appeal and exert downside pressure on the EUR/USD. However, the holiday mood restricts the pair’s immediate moves despite retreating to 1.0920 during early Friday.
Also read: EUR/USD eyes fourth weekly gains above 1.0900 despite US Dollar’s bounce ahead of US NFP
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