It isn’t often that we get the DJIA up or down just 5 points but today we did as all the nervous nellies await a Fed decision that honestly is somewhat inconsequential to everyone.
As long term income investors we care about long term rates for the most part. We only care about short rates because we earn more money on true “cash” in our accounts. Those years of receiving 1 penny on $50,000 (or whatever number) were not helpful to us conservative types as it pushed investors into areas they weren’t comfortable in and probably shouldn’t have been in – like MLPs – in a search for yield.
Today is a special day to some observers as new Fed Chairman will have a press conference after the rate hike is announced. This as always will be most important to folks. We may have it on in the background of the office, but it is important to use just to get it out of the way so markets can trade on data that really matters.
The 10 year treasury is trading right at 2.90% this morning and we suspect will hold there unless the Fed Chair really screws up at the press conference and says something totally unexpected.