We have lots of forecasters (guessers) that are forecasting Fed Funds rate hikes, pauses or cuts—of course not a one of them has a track record to prove they have a clue as to what is really going to happen.
But today we can see with our own eyes that the 10 year treasury is up another 7 basis points to be trading at 4.92% and there should be no doubt it isn’t pretty in the perpetual preferred and long dated maturity baby bonds. I feel damned fortunate to hold lots and lots of CDs and treasuries—and a much reduced (from normal) position in perpetuals and long dated bonds.
I am not tempted whatsoever to buy anything today–it may be 3 months or it may be 9 months before this whole story plays out and CDs at 5.7% are looking pretty damned good. I’m watching for higher rates in CDs as it looks like we may be relegated to that arena for a while–of course who really knows.
So we have the ‘beige book’ being released in 30 minutes or so – maybe it will boost stocks and bonds—or of course maybe it will slap them down even harder—who knows, but you can be relatively certain that we will have a market reaction.