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PA Market Report: Overview (Mar15 – Mar19) & Upcoming Events Mar’21

priceactionadmin 4 years ago

3rd week of March! Almost 3 months of this year have passed. So many things happened and many significant events are coming up. Let’s look into what happened last week and more upcoming important events.

March 12:

Biden signs $1.9 trillion Covid-19 relief bill into law; ; includes $1,400 checks, $300/wk jobless benefits, child allowance of up to $3,600 for one year, $125B for K-12 schools, $25B for rental assistance, $14B for vaccine distribution.

March 13:

As President Biden signs into law one of the largest economic rescue packages in US history, the chair of the Federal Reserve will have his work cut out trying to soothe nerves building on bond markets. The central bank is expected to give a relaxed stance on inflation fears at next week’s meeting but doubts continue to grow. Economists predict that Biden’s $US1.9 trillion ($2.5 trillion) stimulus package will be a game changer for the American economy, while bond yields have rocketed in recent months as investors prepare for higher rates.

March 15:

Treasury Secretary Janet Yellen said U.S. inflation risks remain subdued as the Biden administration pumps $1.9 trillion in pandemic relief into the economy and a return to full employment comes into view. Yellen and other officials insist the aid – which comes on top of pandemic relief passed by Congress last year — is badly needed for an economy slammed by Covid-19, particularly low-income workers heavily represented in service industries, despite signs of recovery.

March 18:

US 10-Year yield rises above 1.7% to highest since Jan. 2020. Some have wondered if the Fed might try to keep yields in check by increasing the amount of longer-term Treasurys that it buys each month.

MARCH 19:

The bond market had a wild ride on Thursday, reacting to the Fed’s willingness to permit the economy and inflation to run hot as the job market recovers. Strategists say that the market had initially responded to the Fed’s dovishness and forecast for no rate hikes through 2023. By Thursday morning, rising inflation was the top concern. The bond market reacted dramatically to the Fed’s policy to allow it to run above its 2% target.
Federal Reserve Board announces that the temporary change to its supplementary leverage ratio (SLR) for bank holding companies will expire as scheduled on March 31.
The U.S. dollar traded higher against all of the major currencies on Thursday, erasing most of its post FOMC losses. The Federal Reserve has no plans to raise interest rates until 2023 but the recovery in the dollar and rise in Treasury yields tell us that investors continue to be drawn to the economy’s positive outlook.

Upcoming Events:

March 22: