Inflation fighting will lead to economic contraction?
The U.S. 10-year Treasury is a very important indicator that is used as a benchmark for mortgage rates. It is also seen as an indicator of investor sentiment toward the economy.
The chart below shows the U.S. 10-year Treasury yield. 3% is an important level. In fact, the 10-year yield has been hovering around 3% since the beginning of May this year, as if the market debate over inflation and disinflation has not been concluded.
The vertical blue dashed line is the date of the FOMC interest rate announcement, and the orange dashed line is the date of the FOMC meeting minutes release. These dates seem to be important, interest rates turned around the FOMC date since May.
The 10-year rate has been on an upward trajectory since the beginning of the year, and the Fed's policy mistakes have sparked worries about high inflation. Will the Fed be bold enough to raise interest rates by 100 points next week, causing the market to worry that inflation fighting will lead to economic contraction, causing the 10-year rate to fall below the uptrend?
The chart below shows the U.S. 10-year Treasury yield. 3% is an important level. In fact, the 10-year yield has been hovering around 3% since the beginning of May this year, as if the market debate over inflation and disinflation has not been concluded.
The vertical blue dashed line is the date of the FOMC interest rate announcement, and the orange dashed line is the date of the FOMC meeting minutes release. These dates seem to be important, interest rates turned around the FOMC date since May.
The 10-year rate has been on an upward trajectory since the beginning of the year, and the Fed's policy mistakes have sparked worries about high inflation. Will the Fed be bold enough to raise interest rates by 100 points next week, causing the market to worry that inflation fighting will lead to economic contraction, causing the 10-year rate to fall below the uptrend?
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