US Yields Approach 5% Amidst FED's 75bps Rate Cuts
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According to Michaël van de Poppe, US Yields continue to rally and are nearing a new high at 5.00%, following the FED's 75bps rate cuts in 2024.
SourceAnalysis
According to Michaël van de Poppe's tweet on January 13, 2025, US Yields are on an upward trajectory, currently standing at 4.80% and approaching the significant 5.00% threshold. This rally comes in the context of the Federal Reserve implementing a 75 basis points rate cut in 2024. The market is closely observing these developments as US Treasury Yields are a critical indicator for global financial markets. The 5.00% level is particularly noteworthy as it represents a psychological barrier, and breaking above it could signal further economic implications.
The trading implications of this yield rally are multifaceted. Higher yields generally suggest increased borrowing costs, which can lead to tighter financial conditions. Investors may need to reassess their portfolios, especially those with exposure to interest-rate-sensitive sectors like real estate and utilities. The source indicates that the current economic backdrop includes weaker labor markets and an anticipated Trump inauguration, which could further influence market dynamics through the 'buy the rumor, sell the news' phenomenon. This market behavior suggests that traders might already be pricing in political events, with potential volatility around actual announcements.
From a technical perspective, the volume of US Treasury securities traded has been substantial, suggesting strong market interest. Source data as of January 13, 2025, shows heightened trading activity, likely due to investors adjusting positions in anticipation of further rate movements. Technical indicators such as moving averages might show a bullish trend continuation if yields break the 5.00% mark. Additionally, on-chain metrics for related financial instruments may reflect increased market participation. Traders should monitor these indicators closely, as they provide actionable insights into market sentiment and potential future movements.
The trading implications of this yield rally are multifaceted. Higher yields generally suggest increased borrowing costs, which can lead to tighter financial conditions. Investors may need to reassess their portfolios, especially those with exposure to interest-rate-sensitive sectors like real estate and utilities. The source indicates that the current economic backdrop includes weaker labor markets and an anticipated Trump inauguration, which could further influence market dynamics through the 'buy the rumor, sell the news' phenomenon. This market behavior suggests that traders might already be pricing in political events, with potential volatility around actual announcements.
From a technical perspective, the volume of US Treasury securities traded has been substantial, suggesting strong market interest. Source data as of January 13, 2025, shows heightened trading activity, likely due to investors adjusting positions in anticipation of further rate movements. Technical indicators such as moving averages might show a bullish trend continuation if yields break the 5.00% mark. Additionally, on-chain metrics for related financial instruments may reflect increased market participation. Traders should monitor these indicators closely, as they provide actionable insights into market sentiment and potential future movements.
Michaël van de Poppe
@CryptoMichNLMacro-Economics, Value Based Investing & Trading || Crypto & Bitcoin Enthusiast