Published August 23, 2024
The market is eagerly awaiting the commencement of Federal Reserve interest rate cuts next month. The sharp, nonstop rebound from the August selloff provides ample evidence of investor enthusiasm for the upcoming cuts. Market interest rates have fallen back to where they were 18 months ago. The chart below shows how the yield curve has changed over the past year. The left side of the curve displays very short-term rates (1 month to 1 year) which are driven by the Fed. They have been anchored to the Fed’s 5.25% short-term target rate while the longer-term rates have fallen notably.
