The Fed cut interest rates again. Last night's FOMC meeting announced a 25 basis point rate cut, bringing the benchmark interest rate down to 4.5-4.75%, which is basically in line with expectations.
Currently, what everyone is more concerned about is the impact of the election on the Federal Reserve, the future path of interest rate cuts, and the ongoing issue of rising US bond rates.
–The impact of the election on Federal Reserve policy:Last night, the most interesting question was when the reporter asked Trump if he could fire the Fed Chairman, Powell repeatedly answered no 4 times. In fact, legally the Federal Reserve has independence, so the election may not have a short-term impact on Fed policy. However, one of Trump's policies is low interest rates, so in the future, Trump may indeed exert pressure on the Federal Reserve.
–How much will the future rate cut be:From the wording in the statement,The market's rate-cutting path has narrowed somewhat.Powell's speech remains neutral, and according to the implied pricing of cme futures, there are currently a total of three rate cuts, one in December this year, and one each in March and June next year.Reaching 3.75-4% in June 2025.The September Fed dot plot shows a decrease to 3.4% in 2025, so the market is currently more pessimistic about the extent of future rate cuts.
–U.S. bond yields continue to rise.Powell's statement suggests that the rise in U.S. bond yields may not be due to concerns about inflation, but rather driven by economic growth. The continuous rise in U.S. bond yields has led to a decline in bond prices.$20+ years US Treasury ETF-iShares (TLT.US)It has dropped from a high of $101 in September to now only...