US: Weaker global growth to impact monetary policy? – Danske Bank

Analysts at Danske Bank note that the US Treasury market rallied on Friday after soft comments from the Fed's Clarida and Kaplan.

Key Quotes

“The discussion is now more about whether weaker global growth will impact US monetary policy and less about bringing US policy yields to or even above the neutral level, which was the theme just a few weeks ago after the surprisingly hawkish comments from Powell at the beginning of October.”

“In particular, the front-end of the curve rallied and on top of a widely expected December hike some 30bp is now priced in 2019. We have little doubt that this week the market will continue to scrutinise any signs that the Fed has become more concerned about global growth or if monetary policy in the US is still on auto-pilot.”