Treasury yields are mixed as bond buyers assessed future growth and inflation issues following yesterday’s quarter-point interest rate cut by the Federal Reserve and their hints of two additional cuts by year’s end.
Chairman Jerome Powell’s recent comments suggest that the Committee is more concerned about softer job growth than the inflation side of their mandate. They have cited an upward revision to GDP and inflation projections, and importantly, have signaled confidence in their ability to support both issues.
If growth remains solid and unemployment stabilizes, the Fed will be cautious about cutting too fast or too much. This cautious approach is likely to keep long-dated yields somewhat higher, providing some opportunity for long buyers.
