Today, the Federal Reserve’s Open Market Committee (FOMC) met and revealed … no change to rates. BUT are willing to cut more than 25 basis points at the upcoming meeting on July 31 (more flexibility).
The FOMC’s Dots Plot (where members think rates will be in the future) is expected to rise after 2020. (Thanks to Rudy Havenstein!)
The economy is generating only 1.5% core inflation, below The Fed’s target rate of 2%.
On the announcement of no rate cuts and a possible rate cut of 50 basis points in July, both the 10-year and 2-year Treasury yields declined.
10-year Treasury Note.
2-year Treasury Note.
Fed Funds volatility surface? Looks like a Tsunami!
Where is the inflation??