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Bond market indicators sound the alarm: inflation may fall below the Federal Reserve's target.
The 10-year breakeven inflation rate has fallen to 2.02%, the lowest since 2021, indicating that investors expect the 10-year average inflation to be below the Federal Reserve's target of 2%. Wall Street strategists believe that this indicates investors are concerned about the Federal Reserve's slow monetary easing actions.
Financial markets closely watch Harris's first direct confrontation with Trump, a comprehensive look at the focus of stocks, exchange rates, and bonds.
The stock market is concerned about tax and tariff plans; the bond market is concerned about fiscal plans; the foreign exchange market is watching Trump's tariff comments and whether they involve pressuring the Fed to cut interest rates more aggressively.
Treasurys' Rally Into Fed Rate Cuts Is More Pronounced Versus Previous Cycles -- Market Talk
Treasury Yields Rise Ahead of Final Inflation Prints Before Fed Meeting
US stocks rebounded, shocking Wall Street! This week's focus will shift to the "Hart's first debate" and CPI data.
①After last week's sharp drop in US stocks triggered by economic concerns, a new wave of bottom-buying stimulated a rebound in the stock market on Monday; ②Looking ahead to this week, traders are closely watching the US inflation data scheduled for release on Wednesday, in search of clues on the scale of the Fed's interest rate cuts; ③In addition, the first presidential debate between Harris and Trump on Tuesday night also attracted the attention of many industry insiders.
The rate cut came too late! Bond traders believe that the Federal Reserve is severely lagging behind.
Last Friday, the bond market sent out several warning signals of potential economic recession, one of which was the changing relationship between the 2-year and 10-year US Treasury bond yields.
