BOND BEWILDERMENT

Since the Fed’s first rate cut of this cutting cycle on 9/18/24, the 10-year Treasury has risen 50bps. Historically, after 175bps of cuts the 10-year is 30bps lower. What we’re witnessing is unusual. It’s either investor fears about fiscal profligacy and tariffs leading to higher rates to attract lenders or concern that the Fed will lose its independence to the White House which will result in higher inflation, or both.