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How Low Could Mortgage Rates Go Now That the Fed Has Finally Started Cutting? Economists Weigh In
Fed Rate Cut Fuels Market Rally Amidst Valuation Fears
The most 'hawkish' official of the Federal Reserve: It should not cut interest rates by 50 basis points this week, as inflation remains above the target level.
Federal Reserve board member Bowman said that she does not support a 50 basis point rate cut by the Fed this week, but instead leans towards a 25 basis point cut. The reason given by Bowman is that inflation is still above the target level of 2%, and a 50 basis point rate cut may make the public believe that the Fed has declared victory over inflation too early.
Equity and Bond Flows Are Skewed to the Downside According to CTAs
Treasury Yields Just Shy of Two-week Highs Amid Optimism on the U.S. Economy
The Nasdaq surged, defensive stocks stagnated, long-term bonds fell, and the Federal Reserve ignited market risk appetite in the United States.
The overnight US Treasury bond trend is divergent, with the 2/10-year Treasury yield curve reaching its steepest level since June 2022. The reason is that the Federal Reserve significantly cut interest rates by 50 basis points, boosting inflation expectations, increasing the risk premium for long-term bond investments, and causing prices to fall accordingly; while short-term bonds are more attractive due to higher nominal yields.
