Sometimes things don’t always go according to plan. An unexpected car repair can blow the monthly budget. A lingering illness can delay completing a big project.
When it comes to the schemes of central planners this is especially true. A five-year plan may list certain goals and objectives. It may even outline a roadmap for achieving them. But reality has a way of taking things off their intended course.
The Federal Reserve commenced its rate cutting cycle on September 18, when the yield on the 10-Year Treasury note was about 3.70 percent. Since then, and in the face of a full 1.00 percent in Fed rate cuts, the 10-Year Treasury note yield is now at 4.60 percent. The Treasury market, as represented by the 10-Year note, is diverging from Fed rate cuts.
One possible reason is that the Fed made a mistake when it declared ‘mission accomplished’ in its fight with consumer price inflation. The Fed thought the moderating rate of consumer price inflation would continue. That it had set the trajectory of prices, and before long they would fall in line with its arbitrary 2 percent target. Continue reading