More Bessent: He emphasized the importance of sound formulation and communication of monetary policy
Treasury Sec. Bessent after meeting with BOJ Ueda said:
- He emphasized the importance of sound formulation and communication of monetary policy to anchor inflation expectations
- Expressed strong support for Japan’s decisive market and monetary steps to address the substantial undervaluation of the yen.
- The role of the Yen weaknesss in contributing to domestic inflationary pressure in Japan.
Yesterday Bessent said that the Fed does not tend to raise rates due to supply shocks implying the Fed did not need to tighten policy. He also commented how the 10 year yield is near the rate at the start of the administrations term. He seemed to imply the Fed did not need to tighten which was somewhat counter to the Fed Chair comments last week. He also did not acknowledge the decline in the 10 year yield from 4.80% to 3.86% and the subesquent rise back to 4.80% implying a rise in inflation and potentially inflation expectations. Inflation shocks can lead to increased inflation expectations.
PS. Crude oil is up more than $3 and trades at $89.34 as reports of American attack on Iran.
This article was written by Greg Michalowski at investinglive.com.