TLH

Rate Cut Forecast Now Seen For September At Earliest

Rate Cut Forecast Now Seen For September At Earliest Apr. 19, 2024. September is now seen as the earliest date for policy easing. Fed funds futures on April 18 are estimating a roughly 71% probability that the Federal Reserve will reduce its current 5.25-5.50% target rate at the Sep. 18 meeting.

Belated March CPI Analysis

March CPI release convinced the Fed and the market that inflation has stalled. Boy Wirat says he thinks the great inflation bubble that started three years ago has long since popped. He says the main reason inflation is still high is because of the way shelter costs are calculated. Boy says housing price inflation has dropped significantly from its peak.

Treasury yields resume climb, J.P. Morgan flags risk of US2Y consolidating at 5%

Treasury yields resume climb, J.P. Morgan flags risk of US2Y consolidating at 5% for the third time this year. New York Fed president says he doesn't feel an urgency to cut interest rates. The longer-end 30-year yield rose 4 basis points to 4.75% on Thursday. The 2-year US2y yield hit the 5% level on Wednesday.

Rate Volatility's Market Implications

Higher-For-Longer Risk For Rates Drives Up Treasury Yields

Federal Reserve Chairman Jerome Powell on Tuesday conceded that inflation progress has stalled and the case for rate cuts has weakened. The 10-year Treasury yield is paying attention and rose to 4.67%, the highest since Nov. 6. The Treasury market has convinced the crowd to demand a higher yield.

Pre-FOMC: A Different Type Of Taper

The Federal Reserve is considering reducing the pace of quantitative tightening. The Fed's securities holdings have dropped from $8.5 trillion to $6.97 trillion. Kevin Flanagan says the Fed's ultimate goal is to have only Treasuries on its balance sheet. He says a "QT taper" is not on the immediate horizon.

A (Un)Certain Framework

The FOMC has shifted away from specific metrics and adopted a more ambiguous strategy. The Fed has been using a varied set of targets for monetary policy, but the relevance of these data points is questioned. The FomC's outlook for inflation has become increasingly tilted to the upside.

U.S. 10-year yield tops 4.7% as yields continue to push higher

U.S. 10-year yield tops 4.7% as yields continue to push higher. In April alone, the 10-Year Treasury yield has popped up 47 basis points. Treasury yields have exploded in April after inflation data and strong retail figures. The 10- years last topped 5% late last year.