Powell Signals Patience as Yields Ease

• Overnight, Chair Powell signalled the Fed is comfortable taking time to assess incoming data, describing policy as being in a “good place” while officials evaluate the impact of the recent energy shock. For now, the Fed appears willing to look past oil-driven inflation pressures.
• Bond markets continued adjusting to the push and pull between inflation risks, policy expectations and growth concerns, with yields moving lower again.
• In the US, the 2 year Treasury yield dropped about 8bps to 3.81%, while the 10year fell roughly 9bps to 4.32%.
• Australian bond futures followed the global lead, with the 3year yield declining 6bps to 4.71% and the 10 year easing from 5.11% to 5.05%.
• Domestically, attention now shifts to the minutes from the RBA’s February meeting. The Board delivered a 25bp hike to 4.10%, but the narrow 5-4 split suggests the discussion was finely balanced – markets will be looking for any clues on the dissenting views.