Fed Fails to Un-Invert Yield Curve

Huge portions of the yield curve remain inverted, just not as deep as a few weeks ago.

At the long end, the 30-year bond yield rose from 1.938% on August 28 to 2.375 on September 15.

Today, the long bond yield is now back to 2.22%.

Fed Struggling with Rates

The Effective Fed Funds Rate should be in the range of 1.75% to 2.00% following yesterday's cut but it isn't.

Yesterday, the rate should have been in the middle of the range of 2.00% to 2.25% but was at the high end. On Monday it was at 2.30% and thus outside the range.

The Fed has been struggling for day keeping interest rates in its target range.

On September 17, I noted US Overnight Interest Rate Surges to 10%, Fed Injects Emergency $75 Billion.

10% is more than a bit outside the range but the effective FF rate closed at 2.30% following emergency injections. The emergency injections continued for a third day today and will continue for a fourth day tomorrow.

Something is very wrong somewhere.

Mike "Mish" Shedlock

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Here is the final snapshot of the yield curve and spreads ahead of the first interest rate cut since 2008.

Yield Curve Steepened Since January 3 but Portions Remain Inverted

On Jan 3, portions of the yield curve inverted with the Fed Funds rate. That's gone, but other inversions remain.

Yield Curve Will Invert From the Inside Out

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The market expects a 100% chance of a hike in June and a 78.2% chance of at least one more hike by September. Then what?

July Rate Cut Odds Still 100%

Despite today's jobs report, Implied July rate cuts odds are still 100% but a second cut is now priced out.

Fed Panic! 10-Year vs 3-Month Yield Curve Spread Un-Inverts

Over the past few weeks the 10-yr to 3-month inversion shank. That portion of the curve is no longer inverted. So what?

Why the Yield Curve Inverts in One Simple Picture

The yield curve inverts when the Fed keeps hiking in the face of a slowdown.

What Spot in the Yield Curve is Likely to Invert First?

The yield curve has flattened considerably over the last year. Will it invert? Where? The following chart explains.

Yield Curve is Inverted for Nearly 25 Years

Using the Fed Funds Rate as the baseline overnight duration, the yield curve is inverted for nearly 25 years.