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Gold Jumps, Dollar, Yields Tumble After Powell Fails To Address Negative Rates

Courtesy of ZeroHedge View original post here.

Powell was widely expected to address the historic advent of negative rates priced in by the market to halt the market from pricing in any further NIRP in either 2021 or late 2020, so as to avoid disappointing the market later by saying NIRP won't happen and implicitly tightening financial conditions. However, to the market's surprise, Powell has so far failed to do that, at least in his prepared remarks.

The result was instant, with the dollar tumbling to fresh session lows…

… 10Y yields tumbling…

… gold surging…

… and most ominous of all, traders once again pricing in negative rates for Jan 2021, which were held at bay after yesterday's barrage of Fed speakers who pushed back against NIRP, but Powell's failure to address the topic has clearly awoken at PIRP (opposite of NIRP) vigilantes, who will now push the Fed to see just how far they can go with negative rates.

Powell better address NIRP during the Q&A or all hell will break loose in the Eurodollar strip.


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