Look Over Here, Not There
The mainstream headlines love to speculate about what the Fed wants to do with interest rates.
They parse every speech looking for hints of a cut.
But if you want to know where the market is actually going, you have to ignore the podium and look at the bond market.
The bond market is the smartest money in the room.
And right now, it’s flashing a massive warning sign.
Bonds vs Fed Fund Rate
To keep things simple, I’m going to link a few citations at the end of this section but the main thing to understand is the following:
The 2-year Treasury yield just crossed above the Fed’s own interest rate.
What this means:
The market is currently charging the government more to borrow money than the government thinks money should cost.
This isn't a sign of an imminent crash but it is a sign of intense, unrelenting pressure.
The bond market is effectively telling policy makers, "You're behind the curve."
With CPI inflation clocking in at a sticky 3.8%, the highest we’ve seen since 2023, nobody should be surprised.
Even the leadership brought in with the ‘unspoken’ mandate to cut rates is finding their hands tied by the reality of the data.
They might be forced to do the exact opposite just to keep up with the market.
Link 1: https://etfdb.com/fixed-income-content-hub/may-15-2026-treasury-yields-snapshot/
Link 2: https://tradingeconomics.com/united-states/interest-rate
Recap to Remember
There are many factors that have led us to this point.
And most them should not be a surprise - especially if you’ve been receiving my last few newsletters.
My previous issue would be a good place to start if you’re curious or missed it, I will link it below:
What Does This Mean For Buyers and Sellers?
With pressures up ahead this isn’t a “buy” or “sell” moment.
With the current economic headwinds, your specific financial and personal picture will dictate if this is a strategic moment to buy or sell.
Please mute anyone in your ear telling you to “definitely buy now” or “sell quickly”.
And check on your mortgage lenders if you know any - they may need a hug.
Wishing you and your family all the love and light.
And as always, if you ever need anything - don’t hesitate to email me back or text me.
Grateful for your continued support, referrals and business.
Be well,
