**Bond Yield Increase and Record High Gold Prices; Attention on Powell’s Response to Tariff Impact on Inflation and Rates**
This article was published on South Korea’s largest foreign investment information platform, Hankyung Global Market.
On the 11th (local time), U.S. stock markets opened with a downward trend amid increased concerns over global trade tensions and anticipation of Federal Reserve Chairman Jerome Powell’s testimony. Bond yields rose.
By about 10 a.m. Eastern Standard Time, the S&P 500 and Nasdaq Composite Index had each fallen by 0.3%. The Dow Jones Industrial Average also dropped by 0.3%.
The 10-year U.S. Treasury yield increased by 3 basis points (1 bp = 0.01%) to 4.53%. The Bloomberg Dollar Spot Index, which had been on a rising trend, showed little change. As trade tensions heightened, the demand for gold persisted, and it traded at $2,901.71 per ounce.
Bitcoin fell by 0.5% to trade at $96,922.95.
Nvidia, which had fallen pre-market due to uncertainty caused by Elon Musk’s Tesla CEO’s offer to acquire OpenAI, involved in the Stargate project, rose post-market opening. Meta Platforms, after a 16-day streak of gains, reverted to a decline.
Powell is scheduled to testify at 10 a.m. before the U.S. Senate Banking Committee and will address the House Financial Services Committee the next day. It is anticipated that Powell will indicate that the economy is in good condition and that the Fed has no intention of cutting rates.
The previous day, Trump signed a 25% tariff on all steel and aluminum imported to the U.S. The European Union (EU) responded by announcing retaliatory tariffs.
Ian Lyngen, head of U.S. strategy at BMO, remarked, “It is difficult to estimate the actual impact of the already announced tariffs, and it is much harder to predict the ramifications of any additional tariffs.”
Lyngen noted that Powell would likely be asked about the implications of Trump’s tariffs on the U.S. economy. He pointed out that the market expects Powell to clarify whether the price pressures from Trump’s tariffs would influence the Federal Open Market Committee’s (FOMC) interest rate decisions.
Trump had stated upon taking office that he would demand a rate cut. However, Treasury Secretary Scott Bezent stated last week that the White House would not pressure the Fed for a rate cut and that the government would instead work on deregulation and expenditure cuts to control inflation, hoping this would lead to a decrease in the 10-year Treasury yield.