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U.S. Two-Year Treasury Yield Might Signal Fed’s Next Move to Be a Rate Hike
Over the past 30 years, every time that the U.S. two-year Treasury yield crossed above the fed funds rate, the Federal Reserve’s next move was a hike, Aptus Capital Advisors’ John Luke Tyner said in a note.
“We are currently in that situation,” the portfolio manager and head of fixed income said.
Over the last few months, expectations for Fed rate cuts have been slashed, and transitioned to expectations for rate hikes on the back of a strong economy and high inflation, mostly related to higher energy prices, he said.
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