RATE REVERSALS
08/14/2025 |
For those clamoring for a rate cut, be careful what you ask for. What matters most to the economy is the 10-year Treasury. The Fed, outside of quantitative easing/tightening, only controls the short end of the curve. Last September, when the Fed cut rates by 50bps, the 10-year T-note was at 3.7%, vs. 4.2% today. Cutting rates while inflation expectations are elevated, as they are now, can raise long rates.