On Friday, all the major US stock indices ended higher, making back some of their losses from earlier in the week. But overall, US equities had a bad run with the S&P 500 posting its biggest percentage weekly loss so far this year. The triggers for the sell-off, which saw the Dow, S&P and NASDAQ 100 end down 2.3%, 1.0% and 0.8% respectively, were statements from several US central bank members including Fed Chair Jerome Powell himself. The main takeaway from FOMC members was that they were in no hurry to cut rates. Mr Powell said they needed to feel more confidence that inflation was moving sustainably back to the 2% target, and that he expects the first cut to come ‘sometime this year.’ His colleague, Neel Kashkari, who is currently a non-voting FOMC member, still managed to spook markets by positing the possibility of no cuts this year. This comes as inflation remains stubbornly above target, and we’ll get an update on CPI on Wednesday. There’s also the issue of the undoubted robustness of the US economy. This was demonstrated clearly on Friday with the release of Non-Farm Payrolls. These came in at +303,000 which was way above the 200,000 expected. There was a brief sell-off, but this soon reversed. The US economy is performing unexpectedly well, which does reduce the likelihood of a June cut. The CME FedWatch Tool is getting difficult to read. But it now only suggests that the first 25 basis point cut could happen sometime before the end of September. All this has led to a sharp rise in bond yields, with the yield on the 10-year Treasury note at its highest level since November, having jumped 27 basis points in less than a fortnight. If yields continue to rise aggressively, they are likely to keep a lid on equity prices.