A fall in the 2-year Treasury yield following Wednesday's rate hike signals the Federal Reserve may have made a big policy mistake, says a top Wall Street...
The Treasury market is sending up a warning flare, indicating the Federal Reserve may have made a “policy mistake” Wednesday as it continued to hike rates into an economic slowdown and a banking scare, a closely followed Wall Street analyst warned.
“Yesterday’s Fed decision was the 2nd rate hike which propelled 2-year yields LOWER as the Fed raised rates. Historically, divergent paths between Fed Funds and 2-year indicate a policy mistake,” said Jeff de Graaf, founder of Renaissance Macro Research, in a Thursday note . Stocks were under pressure on Thursday, with the Dow Jones Industrial Average DJIA slumping around 300 points, or 0.9%, while the S&P 500 SPX lost 0.5% as both indexes threatened to extend a losing streak to four straight sessions. Worries over the banking sector and a potential recession continue to dog equities, analysts said.
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