Is Powell already a "lame duck"? "Bond King" Gross leads the sell-off of U.S. bonds!

Recently, the internal divisions within the Federal Reserve and the actions of the "bond king" Gross have attracted market attention, with Powell being accused of entering the "lame duck" phase, while Gross has taken the lead in selling U.S. Treasuries. Here are the specifics:

The origin of Powell's "lame duck" statement

Last week, Federal Reserve Chairman Powell stated that a rate cut in December is far from a "done deal," and that the decision to cut rates in October was not unanimous, marking the first occurrence of a two-way split in six years. Some officials advocated for a larger cut, while others leaned towards pausing action, with Governor Milan suggesting a 50 basis point cut, while Kansas City Fed President Schmidt believed rates should remain unchanged. Subsequently, several Federal Reserve officials, including Dallas Fed President Logan and Cleveland Fed President Harmack, articulated their reasons for maintaining rates, while Fed Governor Waller and Milan took a dovish stance. Bob Michele, head of Global Fixed Income, Currency and Commodities at Morgan Asset Management, pointed out that Powell is gradually losing control over his Fed colleagues and has entered the lame-duck phase at the end of his term.

"Bond King" Gross takes the lead in selling U.S. Treasuries.

Amid increasing uncertainty surrounding the Federal Reserve's policy path, Pacific Investment Management Company (PIMCO) co-founder Gross revealed that he is selling ten-year Treasury futures, betting that high fiscal deficits and excessive issuance of government bonds will continue to push yields higher. Gross had previously warned of accumulating risks in the U.S. financial system, stating that the ever-expanding fiscal deficit and a weakening dollar have led him to maintain a bearish stance on U.S. Treasuries.

The selling of U.S. Treasuries may lead to an increase in U.S. Treasury yields, thereby pushing up the value of the dollar, which affects the flow of funds and asset prices in global financial markets. In addition, other investors are turning to medium-term bonds to reduce exposure to the risks of short-term policy fluctuations #鲍威尔鸽派发言 .