ACTV - The Market Is Beginning The Process Of Pricing In Fed Rate Hikes
2024-05-26 06:15:00 ET
Summary
- Rising interest rates, inflation risk, and a stronger dollar have continued to trend higher in recent weeks.
- The spread between the 2-year and 10-year Treasury yields has fallen below -40 bps, potentially indicating a further inversion of the yield curve.
- Market expectations for interest rates in 2026 are significantly higher than the Fed's projections, suggesting a higher neutral rate and the potential for rate hikes in the future.
Interest rates have risen as inflation risk has returned, prospects for rate cuts have diminished, and the dollar has strengthened. Credit spreads have also widened, as measured by the CDX high-yield credit spread index....
The Market Is Beginning The Process Of Pricing In Fed Rate Hikes