Futures on Wall Street are uncertain, Treasury yields are less than 1.5%. But the “Tiger” alert inflation is coming from the Bank of England
The futures trend in the US predicts a weak start for Wall Street, after last night’s steep declines, which saw the Nasdaq index drop 3.52% to 13,119.43, marking the strongest loss since October 28. The Dow Jones Industrial Average fell 559.85 points to 31,402.01 points, while the S&P 500 index fell 2.45% to 3,829.34 points. Dow Jones futures fell 0.20% to around 31,314 points. Nasdaq futures rose 0.25% to 12,866 points, while the S&P 500 futures rose 0.18% to 3,834 points. Fears of a sudden return to inflation in the US once again led to a sell-off on Wall Street and then in global equities in general. Fears have been renewed by the trend in 10-year Treasury bond prices, which yesterday crossed the 1.45% threshold within a few hours, and even rose more than 1.6% to 1.614%, a record high from February 14, 2020, with a move by some traders . It’s called “Flash Movement”. Yields then returned, however, closing at their one-year high of 1.51%, up about 12 basis points in the session. Also watch out for the comments of the most hawkish BoE member, chief economist Andy Haldane, who said that risks to inflation expectations are both upward and downward, but warned that the “tiger” of inflation may have woken up. Haldane spoke of “the combined effects of unprecedented large shocks and unprecedented high levels of support,” making the task of “central banks in taming the tiger of“ inflation ”difficult and dangerous”. It should be noted that British 10-year bond rates rose to 0.816% following news of Haldane’s speech, while five-year and two-year rates rose to 0.396% and 0.121% respectively. Coming back to the 10-year US Treasury note, this is slowing compared to the boom that occurred on the eve of that, even falling below the 1.5% threshold. However, its rise since the start of the year has been more than 50 basis points.