I think you have to be real careful buying bonds at these levels.
What the market is saying is that implicit in what he's talking about is a suggestion that we are going to see higher rates.
The 30-year bond is being hurt a little bit by fears of increased government spending, no more surplus, deficit spending. But what has mitigated the losses a little bit today is the fact that oil is down so much.
It's a good move. It flattens the yield curve and brings long-term rates down.
People are clearly betting on an aggressive cut.
They're going to be borrowing more money at the shorter part of the yield curve. Is that going to push short-term rates higher? It's pretty fair to say that's going to happen.
I still think (the Fed) will cut 50 basis points next week.
They've been moving in this direction for a couple of years, reducing the size and frequency of 30-year auctions. The big surprise is the timing, not the act itself. It happens in front of a couple of years where it looks like we'll be running deficits.
Copyright © 2024 Electric Goat Media. All Rights Reserved.