Week in a Glance: Bond Yields’ Growth, Powell, and Stimulus

Price dynamics was of primary interest during the past week considering the entire spectrum of financial markets. The US Treasury yields’ sharp rise triggered the worst Nasdaq day in the last 4 months, resulting in the worst month for gold in the last 4 years.

There were no reasons for the increase in the yield of US Treasury bonds yield. Yes, the head of the Fed, Jerome Powell, testified in Congress for 2 days. But if you put his thoughts as briefly as possible, then it’s as follows: do not expect any changes until the situation improves. That is, no increase in the FRS rate is planned, as well as other measures to tighten monetary policy.

Among the victims of the last week were both the stock market and gold and the cryptocurrency market. In addition to the general wave, a certain expert negativity was formed around cryptocurrencies. This refers to the statement by Jannette Yellen (US Treasury Secretary) that bitcoin is nothing more than a speculative asset and doesn’t represent any other value. And then Bill Gates added that if you aren’t Musk, then it’s better to pass by the purchases of cryptocurrencies.

True, it didn't help Musk that he was Musk. Buying 1.5 billion bitcoins is a very risky affair, especially when the cryptocurrency falls by 10% per day. So, the strongest drop in Tesla shares since November 2020 was generally expected and natural last week. That time, Reddit’s interest in speculation flared up again. As a result, Gamestop shares doubled in price.

Well, the week ended with a vote in the House of Representatives for the Biden stimulus package. The first step towards 1.9 trn has been made. The Senate has a say this week.