The Federal Reserve met 6 weeks ago to make a decision on the key interest rate. 25 basis points was a gimme with 50 basis points a possibility.
Well, the possibility became reality with a major 50 basis point interest rate cut.
Many economists and portfolio managers have debated whether economic data warranted a 50 point cut.
Today, we turn to the all-important 10-Year treasury bond yield to see what the market thinks about interest rates. And what we found is that the market doesn’t necessarily agree with the FED.
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$TNX 10-Year Treasury Bond Yield Chart
Since the FED cut the key rate by 50 basis points on September 18, the 10-year yield (which is watched as a barometer for home and auto loans) has risen by over 50 basis points! It is now trading above all moving averages (trends).
Seems that the market isn’t following the lower rates memo. Perhaps it knows something the FED doesn’t.
Twitter: @andrewnyquist
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
