The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) surged 0.8% on Monday, climbing above $101 per share to its highest level since July 2023 as investors anticipate an imminent interest rate cut by the Federal Reserve.
On the same day, Yields on the 30-year U.S. Treasury bond dropped to 3.93%, marking their lowest levels since late July 2023, indicating higher demand for bonds.
The Federal Open Market Committee (FOMC) is set to meet on Sept. 18, and while a rate cut is a sure thing, the size of it remains uncertain.
Probabilities derived from fed futures — as tracked by the CME FedWatch tool — indicate a 61% chance of a 50-basis-point rate cut, bringing the federal funds rate down to a range of 4.75-5%. Yet, there is also a 39% chance of a smaller, 25-basis-point cut.
Chart: TLT ETF Hits July 2023 Highs Amid Rising Speculation Of A 0.5% Rate Cut
Image: Benzinga Pro Analysts And Media Remain Divided
Top financial media outlets have increasingly leaned toward the likelihood of a 50-basis-point cut. They argue that current interest rates are overly restrictive given the state of inflation and the labor market.
However, Wall Street analysts and big banks (i.e., Goldman Sachs and Bank of America) are cautious. They forecast a more modest 25-basis-point cut.
Bank of America did, however, note that a "weak retail sales report" on Tuesday could tip the scales toward more aggressive easing. "A very weak retail sales report" would likely signal weakening consumer spending, potentially prompting the Fed to initiate a larger rate cut to support economic activity.
Goldman Sachs economist David Mericle commented that a larger cut would be "somewhat out of keeping with usual Fed practice." He highlighted that such significant cuts are typically reserved for clear economic crises or notable spikes in unemployment.
Veteran Wall Street investor Ed Yardeni also weighed in on the debate.
"Fifty is the usual amount kicking off an easing cycle, but the economic circumstances are different this time," he said. "There's no recession clearly barreling toward us."
According to Yardeni, if the Fed opts for a larger cut, stock prices could continue to soar, potentially inflating a bubble reminiscent of the dot-com era.
"25bps would be enough for now pending the next batch of data releases—which we expect once again will confirm the economy's resilience," he added.
Now Read:
- Elizabeth Warren Urges Fed To Slash Rates By 0.75%; Veteran Investor Warns Even 0.5% Cut Could 'Reduce Trump's Chances Of Winning'
Image: Shutterstock
iShares 20+年美債etf (納斯達克:TLT)週一上漲0.8%,上漲至每股101美元以上,達到2023年7月以來的最高水平,投資者預計聯儲局即將進行利率下調。
當日,美國30年期美國國債收益率下降至3.93%,爲2023年7月底以來的最低水平,表明債券需求增加。
聯邦公開市場委員會(FOMC)定於9月18日召開會議,儘管減息是板上釘釘的事情,但減息幅度仍不確定。
CME FedWatch工具追蹤的聯儲期貨數據表明,50個點子減息的概率爲61%,將聯邦基金利率降至4.75-5%的區間。然而,25個點子減息的概率也有39%。
圖表:TLT etf觸及2023年7月的高點,因爲市場對0.5%的利率削減預期上升
圖片:Benzinga Pro 分析師和媒體意見不一
一流的金融媒體越來越傾向於50個點子減息的可能性。他們認爲當前的利率過於嚴 restrictive,考慮到通脹和勞動力市場的狀況。
然而,華爾街分析師和大型銀行(如高盛和美國銀行)持保守態度。他們預測會進行一個更爲溫和的25個點子減息。
但美國銀行也指出,週二的「弱零售銷售報告」可能會傾向於更積極的寬鬆政策。如果出現「非常糟糕的零售銷售報告」,可能會預示消費支出的疲弱,可能促使聯邦儲備系統啓動更大幅度的減息以支持經濟活動。
高盛經濟學家大衛·梅里克爾(David Mericle)指出,更大幅度的減息「與通常的聯邦儲備系統做法有些不符」。他強調,此類重大減息通常是爲明確的經濟危機或顯著升高的失業率所保留的。
資深華爾街投資者愛德·雅爾登尼(Ed Yardeni)也參與了這場辯論。
他說:「50個點子是一個開始寬鬆週期的常規數值,但這次的經濟情況有所不同。沒有明顯朝我們走來的經濟衰退。」
根據雅爾登尼的說法,如果聯邦儲備系統選擇更大幅度的減息,股票價格可能會繼續飆升,可能會引發類似於互聯網泡沫時期的泡沫。
他還補充說:「25個點子現在足夠了,等待下一批數據發佈,我們預計這些數據會再次證實經濟的堅韌性。」
現在就閱讀吧:
- 伊麗莎白·禾倫敦促聯儲局將利率下調0.75%;經驗豐富的投資者警告即使減息0.5%,也可能「降低特朗普獲勝的機會」
圖片:shutterstock