

US Rates and Global FX: Ask again later
11 snips May 2, 2025
Meera Chandan, Co-Head of Global FX Strategy at J.P. Morgan, joins Jay Barry to dissect the latest trends in U.S. employment and its impact on economic forecasts. They dive into the Treasury's recent refunding announcement and its effect on foreign exchange markets. The conversation shifts to how Japan's finance minister's comments on U.S. Treasury holdings could affect trade dynamics. The duo also analyzes dollar fluctuations against Asian currencies and the broader implications for other currencies in this uncertain economic landscape.
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Treasury Issuance Strategy Stable
- Treasury maintained predictable coupon auction sizes for several quarters despite market volatility and policy pressures.
- The Treasury advisors pushed back against more activist buyback strategies to protect market confidence and taxpayer interests.
No Evidence of Foreign Treasury Selling
- There is no current evidence that foreign official institutions are selling large amounts of U.S. Treasuries to influence markets.
- Position liquidations in April were broader and not isolated to foreign holdings, reflecting normalization after long duration overhang.
Treasury Yield Outlook: Steeper Curve
- Treasury yields may fall at the front end if U.S. growth weakens and labor market loosens later this year.
- The long-term trend is for higher term premium, causing a steeper yield curve with limited long-end declines.