The 10 year treasury is popping – now at 1.68%–up 6 basis points and now we wait.
The Fed will have their policy statement at 1 pm (CDT) today with a Powell press conference shortly thereafter.
Of course the Fed has announced time and time again that they would keep interest rates low for a very long time based upon inflation and employment. We all know that – they have boxed themselves into a corner and any mention of lifting short rates anytime soon is going to be a problem for the markets.
Investors had a ‘pause’ in rates last week and should have made sure they have their portfolio holdings where they want them.
For me, expecting higher rates in the next few months, I reduced high quality holdings prior to the increase in rates in the last few months. I then bought numerous issues of investment grade issues after they fell—and sold a fair portion for capital gains during the interest rate ‘pause’ last week.
I now have plenty of cash to purchase if we see pricing fall over the course of the next month or two.