The US government debt slid on Wednesday as investors became less optimistic about interest rate cuts this year due to faster-than-expected inflation, and President Trump’s new import duties.
Faster-than-expected inflation led to a surge in interest rates, causing the US government debt to slide. The producer price index report may be closely linked to the consumer price index, as imports surged in December and January.
Federal Reserve Governor Jerome Powell hinted at adjusting interest rates due to tariffs. Glenmede, which manages $47 billion of assets, still expects one rate cut this year but warns that this is uncertain depending on the data.
Markets are hesitant due to a wide “cone of uncertainty” created by Trump’s willingness to implement tariffs. While the administration has outlined its trade plans, their details and implementation remain unclear.
Oil prices fell after President Trump agreed to discuss the war in Ukraine with Russia’s Vladimir Putin.
Source: https://qz.com/treasuries-jerome-powell-interest-rate-cut-cpi-1851761783