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Started By
Message
Lower interest rates
Posted on 12/18/23 at 8:44 am
Posted on 12/18/23 at 8:44 am
if actually comes to fruition, obviously will affect the rate the savings accounts pay. what will happen to the muni fund returns, like the 30 day yield and so forth? not affected? or...?
4
Posted on 12/18/23 at 8:50 am to Jmcc64
If they lower interest rates any time soon I'm topping off my stores and going into the bunker.
Posted on 12/18/23 at 11:53 am to Jmcc64
Lowering the fed funds rate basically has zero impact on longer duration treasury bonds. It will shift the markets risk appetite though with a godly amount of money parked in MMMFs that are capturing the yield of t-bills via repo.
Posted on 12/18/23 at 12:01 pm to Jmcc64
The value of already issued bonds will increase.
Posted on 12/18/23 at 12:31 pm to Jmcc64
There’s some question about the fed lowering rates
Chairman powel said something about the possibility and then the NY fed governor said that they never discussed lowering rates in their most recent meeting.
Looks like some question within the ranks about what’s going on.
Chairman powel said something about the possibility and then the NY fed governor said that they never discussed lowering rates in their most recent meeting.
Looks like some question within the ranks about what’s going on.
Posted on 12/18/23 at 2:57 pm to wutangfinancial
quote:
Lowering the fed funds rate basically has zero impact on longer duration treasury bonds.
It shouldn’t have much impact, but it does. Just look at the charts.
ETA: longer term rates tend to lead shorter term rates but they’re related nonetheless.
This post was edited on 12/18/23 at 3:01 pm
Posted on 12/18/23 at 2:59 pm to slackster
That the market adjusting growth and inflation expectations. Has nothing to do with the Fed. They have plenty of literature on this subject. I think their calculation was that monetary policy has a 10 bps effect on long rates.
This is the 10 year and WTI. The big moves up in long rates basically were concurrent with increase in oil prices. Not high CPI prints or Fed policy rates.
This is without even considering that the Fed is a reactionary institution.
This is the 10 year and WTI. The big moves up in long rates basically were concurrent with increase in oil prices. Not high CPI prints or Fed policy rates.
This is without even considering that the Fed is a reactionary institution.
This post was edited on 12/18/23 at 3:07 pm
Posted on 12/18/23 at 3:35 pm to SlidellCajun
People will use whatever narrative they can to artificially inflate the market.
Posted on 12/18/23 at 4:28 pm to TheWalrus
I think there is some spin going on
The large broker/banks are building concensus for rate drops in 2024 but the fed has no official pronouncement.
It could be a big set up. Build concensus… market rises and no rate drop means big sell off. Big broker/banks cash in before the news and short to gain even more on the downside.
Paranoid?
Maybe
The large broker/banks are building concensus for rate drops in 2024 but the fed has no official pronouncement.
It could be a big set up. Build concensus… market rises and no rate drop means big sell off. Big broker/banks cash in before the news and short to gain even more on the downside.
Paranoid?
Maybe
Posted on 12/18/23 at 5:30 pm to wutangfinancial
quote:
That the market adjusting growth and inflation expectations. Has nothing to do with the Fed. They have plenty of literature on this subject. I think their calculation was that monetary policy has a 10 bps effect on long rates.
They’re all related. I’m not trying to suggest there is a one to one correlation or anything like that, but the direction is a pretty good indicator. Lower growth and inflation expectations lowers long term rates but comes with rate cuts to eventually loosen policy and stimulate growth. Vice versa in the other side of the spectrum.
I can’t tell you what the 10y is or should be if you arbitrarily told me the FFR was 5%, but you can make a pretty good bet on both based on their relative direction.
Posted on 12/18/23 at 7:43 pm to slackster
I think about the Fed and capital markets very unconventionally but I can agree with that 
I’m not even saying you’re wrong there are absolutely bonds traders and users of Treasury that react to Fed policy but I think it’s mostly overblown. I think them raising overnight lending rates and the narrative that they control long rates like they are boogeymen is overblown but very powerful.l but only in the short term for long bonds.
I’m not even saying you’re wrong there are absolutely bonds traders and users of Treasury that react to Fed policy but I think it’s mostly overblown. I think them raising overnight lending rates and the narrative that they control long rates like they are boogeymen is overblown but very powerful.l but only in the short term for long bonds.
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