Interest Rates are at a Crossroads…

We are in a news flow market. President Trump, Treasury Secretary Bessent, Jay Powell, and real fundamental news have interest rate direction in turmoil.

Bessent is focused on the 10 year rate as he is trying to push government borrowing to the long end, hoping that the 10 yr rate declines and helps growth.

Trump while saying he is not watching the stock market, proved this past week that he is concerned about the stock market as he has dampened the tariff talk.

Powell is sitting back, smiling and watching the posturing, he has no agenda, just adjusting to employment levels and inflation numbers.

At the moment shorter term technicals point to upward pressure on rates while longer term technicals point to downward pressure on rates.

Fundamental numbers this week will be dominated by the Atlanta Fed GDPNOW forecast on Wednesday. Bessent has said he doesn’t believe that first quarter GDP will be negative. This will be the last forecast before the end of the month although it will be some time before the actual number is published.

In the end, Fundamentals will be the driver of rates, and that suggests lower rates down the road. In the meantime, stock markets seem to be getting ahead of themselves on this upward bounce.