now that the overnight is at 5.75, long term rates will be cut to 5.0 next month and from there, they will drop again to 3% or lower
bonds will take a hit
- posted
16 years ago
FED will continue to drop interest rates
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- Vote on answer
- posted
16 years ago
Rates fall, bonds' value rises. Generally speaking. Anything else would be an anomaly.
JOE
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- posted
16 years ago
Hmmm. Generally, if interest rates go down, the price of bonds goes up. Why do you think bonds will go down?
Dave
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- posted
16 years ago
I'm still waiting for the "very significant correction". We could still get there...
-Will
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- posted
16 years ago
What bonds are you talking about? Joe is right, and as the WSJ is so quick to point out, bond prices move inversely to interest rates.
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- posted
16 years ago
The "market rate" for short term bonds was 3.09% yeasterday. The huge disconnect between the Fed and the market can mean many things- almost none of them good.
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- posted
16 years ago
Since you bring up the WSJ, here's what they had to say yesterday (Monday):
"[Headline] Longer-Dated Treasury Issues May Bear Brunt of a Rate Cut ...
"Friday['s rate] cut ... was enough to prompt a significant drop in the prices of long-dated Treasuries. ...
"[L]ong-dated Treasuries [] would suffer most from a hasty cut, which could hit the 10-and 30-year issues with the full force of inflation concerns. ... Should investors decide that the Fed has taken its eye off inflation, they will demand far higher premiums for holding long-term interest-rate risk."
Mark Freeland snipped-for-privacy@sbcglobal.net
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- posted
16 years ago
It's official, you're 0-2. What's your next prediction?
-Will