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“The best laid plans of mice and men often go awry” – Robert Burns

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

The Fed decided to hold rates steady once again last week while indicating that it was highly likely to cut rates at its next meeting in September.  Since that decision, markets have decided that the Fed got too cute.  As shown below, with risk assets plummeting around the world this morning, the odds of at least 50 basis points of rate cuts by the September meeting are now at 100%.

Suddenly the Fed Funds Rate all the way up at 5.25-5.50% looks wildly out of line with where the 10-year and 2-year Treasury yields are trading at around 3.75%.