Institution: It should not be expected that a rate cut by the Federal Reserve will lower the yield on 10-year U.S. Treasury bonds

ChainCatcher news, investors and Trump should not expect the Federal Reserve's rate cuts to lower the yield on the 10-year U.S. Treasury bonds. Although DataTrek's research found that when the Federal Reserve lowers the policy interest rate, the yield on the 10-year Treasury bond does indeed decrease, the situation is different if the economy is not in recession at the time of the rate cut. While signs of a weakening U.S. economy are emerging, the market currently believes that there are no signs of a recession yet.

Interest rate futures prices indicate that investors believe the Federal Reserve is almost certain to lower rates in September. Against this backdrop, the yield on the 10-year U.S. Treasury may not change. This is not good news for those applying political pressure on the Federal Reserve to cut rates.