New York (AFP)

The yield on 10-year Treasuries rose sharply as Wall Street fell Thursday after Federal Reserve boss Jerome Powell intervened, reiterating the Fed's commitment to a very accommodative monetary policy.

Around 7:20 p.m. GMT, the US 10-year bond rate was moving around 1.54%.

On Wall Street, the major indices accelerated their fall and sank into the red: the Nasdaq, where the big technology stocks are concentrated, fell 2.6% while the Dow Jones and the broader S&P 500 index gave up a little less than 2%.

Evolving 10% below its last record, reached in February, the Nasdaq was preparing to enter a market correction zone.

Mr. Powell estimated that the US labor market would not return to full employment this year, one of the conditions the Fed has given itself to raise interest rates.

He brushed aside fears of too high inflation to come, indicating that the price hike should remain provisional.

Markets have been nervous for several weeks about a return of inflation as strong economic growth looms in the United States in the coming months with vaccinations and the stimulus plan.

They seemed to be hoping for a change in tone from the Fed, including a sign that the central bank could change the profile of its asset purchases, by selling its short-matured securities to acquire longer-matured bonds and calm the downside. higher yields.

"Mr. Powell said the Fed would be vigilant about market conditions and wouldn't do the stupidity to let inflation run like it did in the 1970s, but he didn't say he was ready to introduce concrete measures to stop the sale of the vouchers, "commented Karl Haeling of the LBBW bank.

Yields move in the opposite direction to bond prices.

A rise in rates is therefore synonymous with a significant movement in the sale of Treasury bills.

"We do not know if this is an impulsive reaction of disappointment in the markets or if we are entering a new phase of rising bond rates," concluded the expert from LBBW.

“Investors are worried that the 10-year rate may rise to around 1.75% before the Fed does something,” he added.

© 2021 AFP