Reward 1000 Tiger-coinsOn Tuesday, 10-year US Treasury yield dropped by around 17 basis points, falling below 4.7%.
Amid escalating tensions in the Israeli-Hamas conflict, investors turned to traditional safe-haven assets like government bonds, driving up bond prices and causing yields to decrease. $iShares 20+ Year Treasury Bond ETF(TLT)$
Despite of this decline, US treasury yields remain elevated and put pressure on stock market $NASDAQ(.IXIC)$ and Fed officials.
Fed officials express dovish signals: rate hike may pause again in November?
Minneapolis Federal Reserve President Neel Kashkari said on Tuesday,
The recent runup in US long-term bond yields is puzzling.
Logan, the Dallas Federal Reserve president and a member of the rate-setting committee, also said that
there may be less need to raise the Fed funds rate” if long-term bond interest rates remain elevated.
As a result, the futures market continues to decrease bets on rate hikes in November and December.
Over 70% probability of rate hike pause this year
Expert predicts moderate oil prices despite inflation concerns
Commentator said oil prices $WTI Crude Oil - main 2311(CLmain)$ won’t surge too much this year.
According to FactSet, the September CPI report is expected to increase 3.6%; core CPI is expected to show an annual increase of 4.1% in September.
While higher oil and gas prices could put upward pressure on prices in coming months, James Kou, a renowned futures trader with over 30 years of experience, stated,
We might have already seen the highest price for US oil this year, which was around $95. The US oil market might undergo a correction above $80.
Many investors think that US treasury yield has peaked because the impact of crude oil prices on the Federal Reserve's core inflation concerns is relatively limited and the pause in 2023 is more likely to happen.
But analysts also mentioned to be cautious if you want to go long on bonds now.
Has the US treasury peaked or not?
Will September CPI bring good news and reinforce the rate hike pause idea?
How do you view the dovish comments by Fed officials?
Leave your comments and repost to win tiger coins~
Comments
We see the risk that yields could push higher in the near term. Over the long run the declining trend in inflation and softness in economic growth should allow yields to fall from current levels later this year and into 2024. It's likely to be a bumpy ride, given the cross currents in the market. It's very difficult to time the interest rate market. Waiting in short duration bonds until the Fed is done hiking rates increases reinvestment risk. Yields are at the highest levels in a decade and we don't expect them to stay that high for long.
Moreover, we believe that the Fed is done hiking rates in this cycle. In the past four cycles, 10-year Treasury yields peaked before the last rate hike and then tended to trend lower.
Therefore, I am bullish for the index for mid term. $SPDR S&P 500 ETF Trust(SPY)$ $Nasdaq100 Bull 3X ETF(TQQQ)$
@TigerStars @CaptainTiger @MillionaireTiger @Tiger_SG @Tiger_comments
🌟🌟🌟According to the minutes of FOMC meeting released today, the majority of the Feds Officials judged that there will be one more rate increase. Some policymakers even said that since yields are so high, no further interest rate hikes would be necessary.
That's great news for the markets and all 3 indexes closed higher today.
The real test comes on Thursday when the all important consumer price index for September will be released.
The yields on the 10 year Treasury note declined today by 9 basis points but hit a 16 year high earlier in September.
It appears for now that the Feds appears to be at the end of its interest rate hike cycle. In geopolitical uncertainty especially with the current Israeli war, it looks like the US Feds are less likely to raise interest rates further beyond 1 more interest rate hike.
It is business as usual for me as the time line for my investments is long term. It's still buy and hold wonderful companies and reap the rewards of their success in the future. That has not changed. For me investing is a marathon not a sprint.
@Tiger_comments @TigerStars
No crystal ball to know if nov will give us good news but current indicators are that likely will give good news. It's all depends whether the war escalates, prices of commodities and their impact on inflation. Rate hike will pause only when the Fed is happy with the inflation results.