Yesterday we got exactly what we expected from the FOMC–nothing–no change. What wasn’t expected was statements from the Fed chair that we may not see cuts in March–a meeting that is 47 days away–a strange comment from someone who is ‘data dependent’. No need to have markets panic–reprice equities for a few days and then move forward. The fall in equities was minor yesterday–down 1.6% on the S&P500 is meaningful, but considering the never ending rise in the last few months–not such a big deal.
Interest rates are trading flattish to down this morning after falling yesterday by 9 basis points. The 10 year is trading at 3.94%–and was as high as 4.12% earlier in the week. With bunches of economic news out in the next 25 hours we could see substantial movement in interest rates–in particular employment news.
Preferreds and baby bonds generally held up well in the common share downdraft yesterday–of course with interest rates dropping there was a push and pull on pricing and ending flattish. Honestly, anecdotally, there has been super demand for preferreds and baby bonds–lots of folks trying to ‘get on board’ with the belief that interest rates are heading down.
Today I may do another nibble buy–we will see–if I do of course I will post it. Looking to add to a current position–I have a couple in mind, but have not determined which will be bought.