Looking at the MACRO Fundamentals from a bond perspective we can see yields increasing.
Taking this into account you are getting a better yield investing in bonds compared to SPX500 returns due to uncertainty in the market
Bonds have two elements being yields an the inverse being price ,
when yields rise price goes down.
When the fed commences the pivot you will see bond yield decreases aligned with interest rates then bonds price will increase in value, as we have an inverted yield curve which means the short term and paying higher yields than long term, which can be seen comparing US02Y & US10Y
DXY follows bond yields !!!
Taking this into account you are getting a better yield investing in bonds compared to SPX500 returns due to uncertainty in the market
Bonds have two elements being yields an the inverse being price ,
when yields rise price goes down.
When the fed commences the pivot you will see bond yield decreases aligned with interest rates then bonds price will increase in value, as we have an inverted yield curve which means the short term and paying higher yields than long term, which can be seen comparing US02Y & US10Y
DXY follows bond yields !!!
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Looking at the US Macro Chart we can a difference between the current Fed fund rate and US02Y
FED Fund Rate minus US02y = 30 basis points
Current CPI minus CPI forward 01Y forward rate = 0.589 basis points
The market believes rates should be lower has not moved YET
FED Fund Rate minus US02y = 30 basis points
Current CPI minus CPI forward 01Y forward rate = 0.589 basis points
The market believes rates should be lower has not moved YET