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+年美债etf (纳斯达克:TLT)周一上涨0.8%,上涨至每股101美元以上,达到2023年7月以来的最高水平,投资者预计美联储即将进行利率下调。
当日,美国30年期美国国债收益率下降至3.93%,为2023年7月底以来的最低水平,表明债券需求增加。
联邦公开市场委员会(FOMC)定于9月18日召开会议,尽管降息是板上钉钉的事情,但降息幅度仍不确定。
CME FedWatch工具追踪的联储期货数据表明,50个基点降息的概率为61%,将联邦基金利率降至4.75-5%的区间。然而,25个基点降息的概率也有39%。
图表:TLT etf触及2023年7月的高点,因为市场对0.5%的利率削减预期上升
图片:Benzinga Pro 分析师和媒体意见不一
一流的金融媒体越来越倾向于50个基点降息的可能性。他们认为当前的利率过于严 restrictive,考虑到通胀和劳动力市场的状况。
然而,华尔街分析师和大型银行(如高盛和美国银行)持保守态度。他们预测会进行一个更为温和的25个基点降息。
但美国银行也指出,周二的“弱零售销售报告”可能会倾向于更积极的宽松政策。如果出现“非常糟糕的零售销售报告”,可能会预示消费支出的疲弱,可能促使联邦储备系统启动更大幅度的降息以支持经济活动。
高盛经济学家大卫·梅里克尔(David Mericle)指出,更大幅度的降息“与通常的联邦储备系统做法有些不符”。他强调,此类重大降息通常是为明确的经济危机或显著升高的失业率所保留的。
资深华尔街投资者爱德·雅尔登尼(Ed Yardeni)也参与了这场辩论。
他说:“50个基点是一个开始宽松周期的常规数值,但这次的经济情况有所不同。没有明显朝我们走来的经济衰退。”
根据雅尔登尼的说法,如果联邦储备系统选择更大幅度的降息,股票价格可能会继续飙升,可能会引发类似于互联网泡沫时期的泡沫。
他还补充说:“25个基点现在足够了,等待下一批数据发布,我们预计这些数据会再次证实经济的坚韧性。”
现在就阅读吧:
- 伊丽莎白·沃伦敦促美联储将利率下调0.75%;经验丰富的投资者警告即使降息0.5%,也可能“降低特朗普获胜的机会”
图片:shutterstock