Treasury yields bounce higher after a choppy week

Stocks have tumbled hard this week, pushing the S&P 500
SPX,
-0.13%
to the brink of a bear market. Equities appeared set for a bounce on Friday, however.

Read: The S&P 500 is on the brink of a bear market. Here’s the threshold.

In an interview aired late Thursday on National Public Radio’s Marketplace program, Federal Reserve Chairman Jerome Powell warned that the central bank’s ability to tighten policy without sending the economy into a steep downturn wasn’t solely up to policy makers.

“So the question whether we can execute a soft landing or not, it may actually depend on factors that we don’t control,” Powell said. The Fed chief, who won confirmation for another four-year term from the Senate on Thursday, underlined the Fed’s aim to get inflation under control and acknowledged that policy makers probably should have moved earlier to begin raising rates.

Powell quibbled with the suggestion that last week he had taken the prospect of a 75 basis point rate rise off the table, emphasizing that he had said, “We weren’t actively considering that.”

“But I would just say, we have a series of expectations about the economy. If things come in better than we expect, then we’re prepared to do less. If they come in worse than we expect, then we’re prepared to do more,” he said.

Economic data ahead includes April import prices at 8:30 a.m., followed by the University of Michigan consumer sentiment index for May at 10 a.m. and comments by Minneapolis Fed President Neel Kashkari at 11 a.m.

What analysts are saying

The market “is clearly caught between the prospect of persistently elevated inflation on one side and recession on the other. As a result, sentiment seems to be moving sharply from high inflation to recession and back again, with the result that government bonds are seeing huge volatility,” said Steve Barrow, head of G-10 strategy at Standard Bank, in a note.