The Fed Is Holding. The Economy Around It Is Not.
The federal funds rate lower bound has sat at 3.75% without moving. The Fed is in a deliberate pause, watching. What makes that interesting right now is everything else shifting underneath it.
Fed Watch
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The Fed Holds at 4.0%. The Bond Market Says That Might Not Be Enough.
10Y-2Y Spread: 0.33% (normal, but stretched)
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The Yield Curve Just Lost a Third of Its Buffer in Two Weeks
The 10-year/2-year Treasury spread narrowed to 0.33% on October 15, down from 0.51% just eight days ago. That’s a 35% compression in under two weeks, and it’s moving in one direction.
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THE COPY (Data Wire):
The Fed Rate Hasn’t Moved in Six Days.
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The Fed Hasn’t Moved. That Itself Is a Decision.
The federal funds rate target sits at 3.75%, unchanged, and unchanged for every session in the data going back through mid-October. No cut. No hike. In monetary policy, holding still is an active cho
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THE COPY (Fed Watch):
The Fed Holds at 4.0%: But the Real Story Is What the Bond Market Is Saying Behind Its Back
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The Fed Held Its Rate Steady for Six Straight Days.
The effective federal funds rate has sat at 3.88% every single day since at least October 8. No drift. No noise. The Fed said it would hold, and the market is holding with it.
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THE BOND MARKET’S INFLATION BET HAS STOPPED MOVING.
The 10-year breakeven inflation rate has sat at 2.33% for the past five trading days, barely budging after a mild drift down from 2.36% earlier in the month. Markets are expressing a view on inflation
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The Yield Curve Is Positive Again. The Hard Part Is Figuring Out What That Means.
The 10-year Treasury yield is sitting 0.42 percentage points above the 2-year yield as of October 13, down slightly from 0.44 just days ago. After nearly two years of inversion that had bond markets f
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The Fed Is Holding Steady. The Real Question Is Whether It Should Be.
The effective federal funds rate has sat at 3.88% for six consecutive trading days without moving a basis point. On its face, that’s about as boring as economic data gets. Underneath it, something wor
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The Fed Holds at 4.0%, But the Real Story Is What’s Happening Around It
10Y-2Y Spread: 0.47% (normal, upward sloping)
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The Fed Holds at 4.0%: But the Bond Market Isn’t Waiting for Permission
10Y-2Y Spread: 0.44% (normal, steepening)
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The Fed Holds at 4.0%, But the Real Story Is What’s Happening Around It
10Y-2Y Spread: 0.47% (normal, but barely)
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Bond Markets Are Quietly Saying Something About Inflation
The 10-year breakeven inflation rate slipped to 2.33% on October 9, down from 2.36% just a week ago. That’s a small move in absolute terms, but the direction and persistence matter: this is the fourth
