Fed to the Rescue!!!
Once again, the Federal Reserve did exactly what was expected, lowered the Fed Funds rate by 25 bps while stating the pace of change would slow.

At the same time, the bond marketing fearing the Fed “swing and a miss” on inflation again, sold off, raising longer term yields. And of course, the market suffered a Christmas swoon with the NASDAQ Composite falling over 3.5%.

Investors clearly believe long-term rates are heading higher despite the Fed’s action yet a chart of the yield on ten-year treasuries does suggest a substantial overbought situation.

If any of President Trumps policies and/or the promise of artificial intelligence prove deflationary this trade will reverse in a hurry catalyzing a strong bull market. To us it seems a when not an if………

Regards,

Bruce