The tone of these statements continues to be quite clear: the rises in interest rates will continue, inflation must be beaten, and the market already anticipates an 80% probability that the next step will be to raise 75 bps. However, any nuance that could mean some change from Powell's last harsh intervention has repercussions on the market.
And this is what happened with Fed Vice President Brainard. Although she remained firm on the objective of continuing to raise interest rates and reaching the 2% level, specifically of core inflation, she spoke of the relaxation of supply chains that could have a positive effect on inflation. According to her, it runs the risk of overreacting in the current context.
These phrases were enough for the market to consider it somewhat more "dovish,” The reaction was that treasury bond yields fell, and the 10-year bond dropped nine bps to 3.26%. At the same time, the North American indices moved to rise, and the US Dollar weakened against all its peers except the Yen.