QVMM - The Case Of The Disappearing Rate Cuts

2024-04-30 05:35:00 ET

Summary

• The year began with six rate cuts expected by Fed funds futures markets and other derivative instruments.
• The 10-year Treasury yield went all the way up to 4.74% last week on the worse-than-expected inflation reports.
• If the 10-year Treasury yield keeps marching towards 5%, the S&P 500 will likely decline, similar to what happened last summer, which is about 10%.

Two weeks ago, Fed Chair Jerome Powell let it be known that he had no confidence to cut rates with the present data, and last week's inflation releases surely did not give him any reassurance that the inflation outlook was moving in the right direction. Numerous inflation reports keep surprising to the upside, and Powell has an FOMC press conference to deal with this week, on Wednesday, May 1st....

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