Yellen: Prepared for additional deposit actions `if warranted’

Janet Yellen, secretary of the US Treasury, Cecila Rouse, and Shalanda Young, director of the Office of Management and Budget, are testifying before the House Appropriations Financial Services Subcommittee. Treasury futures are climbing higher across the board in late trade as a result of these significant remarks.

Although yield curves continue to bounce out of deeper inverted levels, front-month 30Y futures tap 132-01 and 30Y yield 3.6690% low.

Estimated rate reductions by year’s end quicken with cumulative -86.6 in December at 3.946%; Fed Terminal drops to 4.89% in May.

In contrast to Fed Chair Powell’s support for regional banks, Treasury Secretary Yellen’s statement on Wednesday had a negative impact on markets since she said that the Treasury Dept. is “not considering broad increase in deposit insurance.”

The prepared text came out earlier than expected: Yellen was expected to say, “we have used important tools to act quickly to prevent contagion. They are also instruments that we may employ again “In her prepared testimony to Congress, she stated.

“The strong actions we have taken ensure that Americans’ deposits are safe. Certainly, we would be prepared to take additional actions if warranted.”

Key Quotes

Prepared for additional deposit actions `if warranted’.

Strong actions have been taken to ensure deposits are safe.

Important anti-contagion tools could be used again.

Seeing reduced pressure on supply chains, lower shipping costs – us house appropriations subcommittee hearing.

Easing supply pressures will eventually pass through to lower inflation.