TLT - The Fed Sent A Signal For The Bond Market To Keep Buying
2024-06-14 02:20:37 ET
Summary
- The Fed announced that rates will stay at 5.5% for now, with only one cut between now and 2025.
- This is based off of macroeconomic data and trends, which I cover in this article.
- The Fed's game plan looks to be on track, and a soft landing is happening now based on current data.
- I also discuss trade ideas I proposed previously and follow up on them and my thoughts around the thesis and how it has/have not changed.
Introduction
On June 12th, the Federal Reserve's Federal Open Market Committee ("FOMC") released a statement saying that they intend to hold rates, and that they only anticipate one rate cut through the end of 2024. This means that the Fed Funds Rate, the rate that dictates the lower level of US consumer, commercial, and sovereign interest rates, will remain at 5.25% - 5.50% for now.
This is a good thing for me as an income investor, as it means that many of the income assets I own tied to ongoing rates like variable-rate bonds will continue to see very high interest rates and pay out far more than they did when the Fed Funds Rate was close to or at 0%....
The Fed Sent A Signal For The Bond Market To Keep Buying