2024-06-11 02:20:00 ET
Summary
- As I have long said, the rest of the world is starting to cut rates in June – even if the Fed doesn’t follow suit.
- Since our Fed will now be lagging Europe in rate cuts, that means our rates will be higher, so “carry trades” are expected to increase.
- In the wake of Friday’s stronger-than-expected payroll report, the 10-year Treasury yield rose back to 4.439%.
- The Institute of Supply Management (ISM) announced that its manufacturing index declined to 48.7 in May, down from 49.2 in April.
- In my opinion, the 11% yields that the private credit industry pays investors are not sustainable.
As I have long said, the rest of the world is starting to cut rates in June – even if the Fed doesn’t follow suit. The Bank of Canada cut its key interest rate by 0.25% to 4.75% last Wednesday. Then, on Thursday, the European Central Bank (ECB) cut its key interest rate by 0.25% to 3.75%.
Other major central banks that have cut key rates recently include Brazil, Chile, Mexico, Sweden and Switzerland. The Bank of England will meet on June 20 th . They originally talked of cutting rates in June, but due to the fact that an election has been declared there, a rate cut may be postponed, so the central bank will not appear partisan....
Read the full article on Seeking Alpha
For further details see:
Overseas Rate Cuts Could Help Lower U.S. Yields This Summer