The 10 year treasury is up 2 basis points–but equities are barely moving. In 30 minutes we have the release of the FOMC meeting minutes from the January meeting. While we know in a general sense what might have been said at the meeting we will have more ‘hints’ at how members are looking at future rate cuts.
Right now the CME Fed Watch tool is only showing about a 6.5% chance of a rate cut in March—after showing a near certainty about a month ago. Also a May rate cut is predicted at just a 29% chance of a cut–June is 52%. So expectations have been severely tempered over the last month or so. Honestly equities have been very patient awaiting the news of a cut–I would have thought we would have seen a more severe sell-off
I expect equities to have a sharp reaction to the news in the 1st 2 or 3 minutes – where it ends up no one knows. We possibly will see a sharp move in interest rates – which way depends on what the minutes specifically say about cuts from individual members. As usual no one knows what will happen. We’ll all wait and see–I pray we don’t get a huge rate spike on the news–we could suffer some losses.
Looks like the news didn’t upset the market. Ended the day pretty much where it started. I think people are getting used to rates staying at this level for awhile longer to say May or even June.
I am not going to say higher for longer. These rates are not that bad. Personally, slower growth is preferable to the economy on steroids running full strength until the next time it falls off a cliff.
The economy and the people have been addicted far too long to low rates and plentiful money to the point businesses and investment were not making sense from a practical view point.
Right now the risk of something breaking is not from high rates but poor planning and investments.
A paper loss on what you own might provide a chance to buy something you don’t own at a good price.
Tim, you only have losses if you panic and sell. But I don’t think your part of that crowd. Keep collecting the dividends and losses will recover.
Charles–never do that – ever. Actually many years ago I did.