Falling Rate Expectations Snap Dollar’s Momentum
Equity futures and risk-sensitive currencies rose slightly last night after the US Senate passed compromise legislation designed to raise the debt ceiling. The ironically-named Fiscal Responsibility Act, which moved through the voting process with extraordinary speed, will suspend the statutory limit on federal borrowing until January 2024, averting a possible default without imposing major constraints on government spending. The measure is now headed to the president for signature. But the real action came earlier in the day, when a series of data releases combined with increasingly-dovish Federal Reserve rhetoric to put Treasury yields and the dollar under pressure.Following Wednesday’s comments from...