Key Second Half 2024 Comments
Conundrum…
Eureka Perspectives August 24, 2024
When market based interest rates are under the fed fund rate, is there precedence whereby market rates rose soon after the fed fund rate was decreased?
Microsoft Co-Pilot answer..
Yes, there have been instances where market-based interest rates rose soon after the Federal Reserve decreased the federal funds rate. This can happen due to various factors, including market expectations, economic conditions, and investor sentiment.
For example, during the 2019-2020 easing cycle, the Fed lowered rates, but market rates initially rose due to concerns about economic stability and investor reactions to other economic indicators1. Similarly, in past cycles, market rates have sometimes increased shortly after a Fed rate cut if investors anticipated future economic growth or inflation pressures.