Group 1 - Home builder stocks experienced a decline after an initial rise following the Federal Open Market Committee (FOMC) announcement, correlating with an increase in the 10-year Treasury yield [1][2] - The iShares U.S. Home Construction exchange-traded fund fell by 0.9% as the 10-year Treasury yield reached its highest level since September 9 [2] - Federal Reserve Chair Jerome Powell indicated that while the Fed does not set mortgage rates, changes in the policy rate tend to influence mortgage rates, which are linked to the 10-year Treasury yield based on future economic expectations [2]

Market Performance - The Dow Jones Industrial Average increased by 40 points, or 0.1% [2] - The S&P 500 also rose by 0.1% [2] - The Nasdaq Composite saw a gain of 0.2% [2] - Both the S&P and Nasdaq reached closing highs on Monday, indicating potential for further milestones [2] Treasury Yields - The yield on the 2-year Treasury note decreased to 3.54% after a brief spike due to stronger-than-expected retail sales [2] - The yield on the 10-year Treasury note slightly increased to 4.05% [2] Federal Reserve Meeting - Market participants are awaiting updates from the Federal Open Market Committee's two-day meeting, which may influence stock performance [1][2]

Market Trends - The US 2-year Treasury yield has fallen below 35%, the lowest level since August 2022 [1] - The 2-year US Treasury yield steadily climbed following the Federal Reserve's interest rate hikes in 2022 [1] - The 2-year US Treasury yield once fell to 35% when the Federal Reserve began cutting interest rates last September [1]

RT The Kobeissi Letter (@KobeissiLetter)This is the definition of broken:In 15 days, the Fed will cut rates for the first time in 2025, yet the 30Y Treasury Yield is now near 5.00%.We have RISING interest rates as markets "price-in" Fed interest rate CUTS.Do you realize what's happening?(a thread) https://t.co/AKt5KG0qx3 ...

Bond Market Overview - Investors should always consider bonds for income, capital preservation, and diversification, regardless of the interest rate environment [5][6][7] - The yield curve, typically referring to Treasury bonds, reflects inflation and growth expectations, and its shape signals future economic conditions [8][9] - An inverted yield curve, where long-term rates are lower than short-term rates, often anticipates Federal Reserve rate cuts due to declining inflation or a weakening labor market [13][14] Investment Strategies & Considerations - Reinvestment risk arises when short-term investments mature and proceeds must be reinvested at lower rates, potentially decreasing income [15][16][17] - Mortgage rates are based on expectations for the next 10-30 years, not solely on current Federal Reserve actions [20] - Investment-grade corporate bonds (rated BBB or above) offer low to moderate risk with average yields around 45%-5%, making them attractive compared to 2010-2022 levels [25][26][28] - High-yield or junk bonds (rated BB or below) are riskier due to higher debt and volatile cash flows, and the current compensation for this risk is relatively low [26][27] Federal Reserve & Monetary Policy - The 1951 Fed Treasury Accord established Federal Reserve independence, separating monetary policy from government spending [2][3][38][39][40] - Fed independence is crucial to avoid using monetary policy for short-term political gains, which could lead to higher inflation, long-term interest rates, and a weaker dollar [41][43] - Quantitative easing (QE), where the Fed buys long-term securities, and yield curve control, where the Fed targets longer-term rates, could undermine Fed independence if used to lower government interest expenses rather than address emergencies [47][48][49][50] Mortgage Rate Strategies - Adjustable-rate mortgages (ARMs) may be favored in a Fed rate-cutting environment, as they are more closely tied to short-term interest rates [55][57] - Potential homebuyers should temper expectations, as mortgage rates may not fall as much as the Fed funds rate, and a return to 3%-4% mortgage rates is unlikely [59][60][61]

Why is it that you think there is a new structural regime for benchmark rates that's going to make it a lot more difficult to get them lower over the next ten, 20 years. So it's a great question, Lisa. So let's cast our minds back briefly to the early 2000, to Ben Bernanke and to the famous savings glut hypothesis.So back then, the Fed was hiking, but long term Treasury rates weren't going up. And Bernanke said is because there's a glut of global saving. All of this money coming from China and Saudi into th ...

Economic Outlook & Monetary Policy - The possibility of Federal Reserve rate cuts is decreasing due to a strong stock market and overall healthy economy [1][2] - The market's expectation for September has shifted from a 25 basis points rate cut to no change [2] - Short-term rate adjustments by the Federal Reserve aim to stimulate the economy, but fiscal challenges require attention [8][9] US Fiscal Challenges - The 30-year Treasury yield has reached 5%, the highest since 2007, indicating increased borrowing costs for the US government [3][4] - The US has $36 trillion in debt with an average interest rate of 33%, resulting in $12 trillion annual interest expense [5][6] - A rise in average interest rate to 5% on the debt could increase annual interest expense to nearly $2 trillion [6] - The US faces a fiscal crisis due to rising interest rates and continuous deficit spending [7] Deficit & Potential Solutions - The deficit's impact is now significant due to rising interest rates [11] - At current deficit levels, refinancing debt at current rates could lead to interest spending exceeding major expenditures like Medicare, Medicaid, Social Security, or the military [12] - Potential solutions involve slowing government spending, increasing revenue (including considering consumption taxes), and deregulation to stimulate economic growth [14][16]