Bond market erases Treasury’s buyback rally in under 24 hours
Fed chairman Kevin Warsh has argued the central bank should take its cues from markets rather than guide them, a position Evercore ISI’s Krishna Guha noted becomes harder to sustain when investors see the Treasury managing the long end.
Minutes from the July Federal Open Market Committee meeting, released Wednesday, showed several policymakers ready to raise rates and many saying a hike would be needed absent progress toward the two percent target.
Gennadiy Goldberg, head of US rates strategy at TD Securities, told Reuters the bar for Fed intervention remains very high, requiring evidence of severe liquidity deterioration and market dysfunction that is not currently visible.
The S&P 500 lost 66.82 points, or 0.87 percent, to 7,641.16, the Dow Jones industrial average fell 703.84 points, or 1.32 percent, to 52,759.21, and the Nasdaq composite dropped 263.92 points, or one percent, to 26,067.17.
The S&P/TSX composite index proved more resilient, easing 36.37 points to 36,365.42.
