During the speech at the Jackson Hole conference in Wyoming on Friday, Fed Chair Powell only confirmed what markets already saw in FOMC meeting minutes – which is that the interest rates might go higher from current levels if the inflation remains persistent. Prior to his speech, the 10Y Treasury yields reached the highest weekly level at 4.358% and remained elevated during the rest of the week. However, some relaxation came as of the weekend, so yields finished the week at level of 4.239%. But the question remains whether this was only a short correction to the downside and if the markets finished with testing of $4.3% level?
Current charts are pointing to the possibility for the 4.3% level to be tested for one more time. This might be supported by the fundamentals which will be released during the week ahead – the PCE Price Index for July and Non-Farm Payrolls for August. Still, there is no indication that yields might go higher from this level. At the same time a short reversal might bring yields back to 4.2% eventually 4.1% levels.
Current charts are pointing to the possibility for the 4.3% level to be tested for one more time. This might be supported by the fundamentals which will be released during the week ahead – the PCE Price Index for July and Non-Farm Payrolls for August. Still, there is no indication that yields might go higher from this level. At the same time a short reversal might bring yields back to 4.2% eventually 4.1% levels.
