Recent stock market volatility has impacted markets far and wide.
Global stocks, currencies, gold, crypto and, yes, bonds.
Look at the decline in the 10-year yield as investors have once again engaged in this flight to safety:
The 25% decline in yields since the September 2023 high has been dramatic. Implications are far reaching for the housing market, interest rate sensitive sectors, and small cap stocks.
We have written regularly on bond market speculators trying to outguess the Fed. It appears to us that bond market movers have made it their mission to force the Fed into emergency rate cuts based on the risk of of an imminent recession.
Our take remains that there will be the first cut in September and the Fed will not be bullied into cutting before that meeting just to medicate the nervousness of the doomsayers.
