Here’s why inflation is kryptonite for bonds as Powell’s comments rock markets

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CNBC: Fed Chairman Jerome Powell expressed little worry about inflation and provided no indication of policy changes ahead.

  • Bonds and stocks both sold off on the comments.
  • Inflation is poison for bonds as it causes rising yields and falling prices.
  • Inflation lowers the value of future interest payments on bond

The bond market sold off Thursday when Federal Reserve Chairman Jerome Powell expressed little worry about inflation and provided no indication of policy changes ahead.

In an exchange with The Wall Street Journal, the central bank leader acknowledged that an economy recuperating from the depths of the Covid-19 pandemic could see some price pressures ahead. Read More

 

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