Federal Reserve Chair Jerome Powell reassured markets that the central bank will look past short-term oil shocks, easing fears of imminent rate hikes and supporting bond markets.
The US 10-year Treasury yield fell to 4.35% while the 2-year yield dropped to 3.83%, as expectations for 2026 rate hikes declined sharply from 25% to 5%.
Despite the relief in bonds, rising oil prices continued to pressure risk assets, with WTI crude closing above $100 per barrel for the first time since 2022.
“We’re not really facing it yet because we don’t know what the economic effects will be,”
Said Federal Reserve Chair Jerome Powell.
US equities reversed early gains, with the Nasdaq closing down 0.75% and the S&P 500 falling 0.4% as higher energy costs weighed on sentiment.
Bitcoin also retreated from earlier highs, slipping back to around $66,500 as broader market risk appetite weakened.
The divergence highlights ongoing macro uncertainty, as stabilising monetary policy expectations are offset by rising commodity-driven inflation risks.
At the time of reporting, Bitcoin price was $67,437.64.