THE WisdomTree BLOG
One overarching question that many investors ask is, Why is the Fed so intent on cutting rates? If judging solely on low unemployment and an impressive June jobs report, many wouldn’t think we should be having a rate-cut discussion. Kevin Flanagan explains why a July rate cut is still likely.
Although the money and bond markets appear to be “chomping at the bit” for a rate cut, expectations for such action at the recent FOMC meeting were low. Kevin Flanagan discusses the outcome of yesterday’s Federal Reserve meeting.
To watch the money and bond markets of late, there is one development that stands out quite clearly: the Federal Reserve has to cut interest rates. In fact, from the markets’ perspective, trade uncertainty plus economic weakness equals three rate cuts in the future.
Recently we heard a narrative regarding the movement in the stock and bond markets—specifically, that the decline in U.S. equities resulted from the drop in the U.S. Treasury (UST) 10-Year yield. Typically, the bond market reacts to developments in the stock market, not the other way around. So, which came first, the chicken or the egg?
Typically, the search for yield comes with added risks, as investors either move too far out in duration or lower their credit quality constraints. But what if an investor could enhance yield in their fixed income portfolio while maintaining familiar risk profiles?