Only a Week Away and Interest Rates are Tumbling

Have folks fallen asleep? The FOMC meeting start is just 6 days away and the ‘statement’ is just a week away with the Fed chair presser immediately following.

Even though the FED statement is highly likely to signal the start of the tapering of quantitative easing (QE) the 10 year treasury is falling in yield–now down to 1.57%–off 4 basis points on the day. On the other hand the 2 year treasury is up 2-3 basis points on the day to .51%–the highest level in 18 months.

My expectations months ago is that we wouldn’t see much disruption to the markets until at least the taper is announced and actual tapering starts. Seems to me that maybe I am too pessimistic–maybe in fact much of the anticipation is ‘built in’? Well I will believe it when I see it – It seems to me that big money in the equity markets will have a ball baby crying fit at some point–it has worked before (making the Fed pause/end tapering).

We’ll see – as always it doesn’t pay to try ‘position’ holdings any differently based on what might happen–none of us are that smart.

One thought on “Only a Week Away and Interest Rates are Tumbling”

  1. Will see Tim,
    I positioned to hold F to F and a few high dividend preferred hoping those to be short term holdings that may be called soon. As you say, no crystal ball for the future so I will worry what to roll over into when the time comes.
    Still concerned about auto loan rates as my new truck is finally close to getting delivered. Last report was its at the BNSF rail yard 60 miles away, yet being told delivery date is Nov. 5th to the 12th go figure ?
    Ford’s 0 % for 6yrs expires Nov 1st. The credit union is quoting 2.9% currently.
    Be interesting to see what rates are quoted after Nov. 1st.
    Commodity pricing on metals is going to finish Oct close to pricing last seen in July.

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