Dollar reverses some of this week’s strong gains as pressured by surprisingly cautious comments from Fed Governor Lael Brainard, in the background of record low in 30-year yield, below 1.9 handle.
Brainard said in a speech that “with trend inflation running below the symmetric 2 percent objective, there is a risk that inflation expectations have slipped. . And, “with price inflation showing little sensitivity to resource utilization, policy may have to remain accommodative for a long time to achieve 2 percent inflation following a period of undershooting.”
Meanwhile, 30-yaer yield hits new record low at 1.892 today. The development argues that TXY might even be resuming long term down trend. it’s a bit early to say. But we’re tentatively looking at 61.8% projection of 3.455 to 1.905 from 2.393 at 1.435 at the next medium term target.