Treasury yields are experiencing a downtrend following the Fed’s decision to continue with a rate pause following its November FOMC meeting. The 10-year yield dropped over 10 basis points, suggesting that market participants are pricing in a Fed likely done with policy hiking.
The US yield curve has been well off its highs since 2007, with a 5% drop since 2007. The market remains within the upward sloping trend channel on a year-to-date chart, but Blikre highlights changes over the last three months.
Data from yesterday, including the Treasury announcement, net Spy returns, and the post-Fed day, trended down. The red line, which usually happens from 2:00 to 4:00 PM, goes back to 2022, where this downtrend has occurred.
Although analysts see the opposite trend in stock and bond volatility, the post-Fed day has also been trending downward. Bonds and stocks both fell, but the market is supported on the two-month chart, indicating that risk markets are heading in the right direction. The market’s expected recovery may not materialize in the next week or two, according to analyst predictions.
Tags FED interest rate hikes interest rate pause T-yields
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