Strong U.S. data has pulled up expectations of economic growth and inflation and put upward pressure on interest rates. That will put downward pressure on the economy, but it remains uncertain how much it will weaken the strong economy.
U.S. Treasury yields were generally unchanged last week as U.S. inflation data met expectations. U.S. Federal Reserve Chair Powell reiterated that the central bank doesn’t “need to be in a hurry to cut.”
Hopes that higher U.S. inflation in January and February would prove to be transient were thwarted as consumer prices rose strongly again in March. Expectations for interest rate cuts from the U.S. Federal Reserve have consequently changed.