The Bond Market Conundrum
A funny thing happened during our long wait for lower interest rates. On September 18th, Jerome Powell finally began reducing short-term borrowing costs with a 50-basis point cut to the Fed Funds rate. At the time, 10y US Treasuries were yielding 3.70%.
Short Term Pain, Big Potential Gain
In January I will begin my 42nd year as a professional investor. Markets are always changing but there is a generally recurring rhythm and calendar.
Growth
Now that the Fed has at last started reducing interest rates, our attention can more singly be focused on growth opportunities in today’s economy. The obvious, and most talked about trend is artificial intelligence.
Normalization
The ad nauseam discussion of when the Federal Reserve would cut interest rates finally concluded on September 18th when Jay Powell announced a 50-basis point reduction in the Fed Funds rate.
Newton’s Laws of Motion define action in the physical world. The third law states that for every action there is an equal and opposite reaction. Because we are believers in science, we tend to apply these principles to arenas beyond the physical world. Economics and finance, for example.