Rates, rates and rates

The chart below puts together perhaps the most important combination of rates that will shape the US economy not only for the rest of 2026, but perhaps the rest of the decade. Fed funds futures and the SOFR curve are indicating higher rates ahead. We are talking about a 4ish handle again for Fed funds. At the beggining of this year (and frankly not that long ago, when Trump was pressuring to lower rates quickly) we were debating wether we could go down to 2%. The dot plot that we’re looking at may be less relevant if Kevin Warsh comes with a different approach, but the current voting members of the FOMC are not changing, which means we shouldn’t expect a big change in their opinions and their votes. And finally the 10 year yield appears to be breaking to the upside. Is the Fed going to apply the “temporary” narrative to inflation like they did in 2022, only to raise rates on a rush later to control surges in prices? In 4 weeks the new chairman will let us know what his take is and how he will manage the short end of the curve. The long end will respond by itself, at least for the moment, absent any intervention.

Want to know more? You can register for free at Fund@mental.

#iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation