Rates as of 0500 GMT

Market Recap

Expectations of faster US growth causing higher US inflation and higher US interest rates pushed the dollar up and JPY down. Other currencies basically just went along for the ride.

Its noticeable that gold and silver both lost ground, contrary to what one might expect if you think of gold as a hedge against inflation. It may be a hedge against inflation but its not a hedge against higher interest rates.

The factor underlying all these moves is of course todays speech by President Biden unveiling his new infrastructure plan, part of his Build Back Better agenda. The Washington Post had some new details about it today. They said the plan would involve around 2.25tn in new spending spread out over eight years, paid for by tax hikes on companies and wealthy individuals mostly reversing the 2017 tax cuts that would offset the new spending over 15 years.

According to the WP, the plan involves approximately 650bn to rebuild the countrys infrastructure, such as roads, bridges, highways, and ports; some 400bn toward home care for the elderly and the disabled; 300bn for housing infrastructure; and 300bn to revive US manufacturing. It will also include funds to strengthen the electric grid, develop nationwide highspeed broadband, and ensure clean drinking water everywhere, among other major investments. There will also be approximately 400bn in cleanenergy credits on top of the 2.25 trillion in new spending.

This resourceintensive investment…