In view of heightened inflation risks, US Federal Reserve Chairman Jerome Powell is preparing the financial markets for a tighter course by the Fed. In his view, a rise in prices and hiring difficulties after the Corona crisis could last longer than expected, Powell said at a Senate committee appearance. If inflation solidifies, the Fed will “certainly react” and use its tools, he said. This lifted the dollar index, which reflects the exchange rate to major currencies, to an eleven-month high of 93.778 points on Tuesday. The euro fell accordingly and was quoted 0.2 percent lower at 1.1672 dollars in the evening. At the same time, investors sold US Treasuries, causing the yield on ten-year US bonds to rise to a three-and-a-half-month high of plus 1.567 percent. At minus 0.172 percent, their German counterparts were as high as they were last three months ago.
The situation on the raw materials market relaxed only partially. A barrel of North Sea Brent cost $ 78.61 one percent less in the evening. Before that, however, the price passed the $ 80 per barrel mark for the first time in three years. “The persistent supply deficit is pushing inventories to their lowest level in decades,” wrote analysts at Barclays Bank. The situation is exacerbated by the problems that OPEC members Nigeria and Angola have in meeting their production quotas.
However, the gas price rally continued to rise. US prices climbed as much as ten percent to a seven and a half year high of $ 6.28 per million BTU. The British contract gained almost seven percent at times and, at 185 pence per Therm, was as expensive as it was three and a half years ago. The latter was also boosted by falling Russian gas supplies, said stockbrokers.