The US Long-Term Treasury Bond Faces Further Sell-Off Risk Due to Lack of Clear Guidance

BlockBeats News, August 24th - This week, bond investors will closely watch Fed Chair Powell's speech at Jackson Hole. The market is seeking his response to ongoing inflation and fiscal issues, with long-term bonds facing further selling pressure.

Since taking office in May, Powell has rarely provided forward-looking policy guidance. His comments after the last monetary policy meeting triggered a massive sell-off in the bond market, highlighting the market's high sensitivity to his speech on Friday.

Molly Brooks, U.S. Rate Strategist at TD Securities, said: "I believe that if he continues to provide little additional information, the market will be disappointed, potentially exacerbating the recent sell-off in long-term bonds."

Kathy Bostjancic, Chief Economist at Allstate Insurance, stated that factors weighing on the bond market persist, including fiscal concerns, inflation, and market uncertainty about the Fed's policy response.

Dhiraj Narula, Interest Rate Strategist at HSBC, said this provides an opportunity for Powell to reassure investors by clarifying his policy outlook. He said: "In our view, if Chair Powell can make some judgments about potential inflation pressures, it may be enough to reduce the term premium associated with uncertainty."