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The March 17th FOMC meeting is likely to be one of the most important for Chair Powell in his tenure at the helm of the central bank, with many drawing comparisons with the task presented to his predecessor Bernanke back in 2013. However, despite its level of importance, the meeting doesn’t require a decision on policy measures by the FOMC beyond what they wish to do with the Supplementary Leverage Ratio (SLR) relief. Instead, the challenge is one of communications. Since the January meeting, the US yield curve has substantially steepened with the 10-year yield rising some 60bps to trade above the 1.6% handle. While most of the rise in back-end yields can be attributed to rising inflation expectations, real yields began to increase in late February along with expectations of rate hikes.

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