Loading ...Ready for another shock-and-awe panic-cut by the Fed? Last time the Fed panic-cut was in 2007/2008, and look what happened to stocks.
By Wolf Richter for WOLF STREET.
Spooked by the Fed’s shock-and-awe surprise 50-basis-point rate cut, the already frazzled markets did a job today. Gold surged nearly 3%. The three major stock indices all swooned nearly 3%. And Treasury yields plunged across the board.
The 10-year Treasury yield plunged from 1.13% pre-announcement to an intraday low of 0.935%, and closed officially at 1.02%. When the yield drops, it means that bond prices rise. In late trading the yield fell below 1% again, and is currently at 0.997% reflected in the chart (data via Investing.com):
The one-month yield – in a sign that this was a surprise act – plunged 34 basis points, most of it instantly, from 1.45% just before the shock-and-awe rate-cut announcement to 1.11% at the close, which put it in the middle of the Fed’s new federal-funds target range between 1.0% and 1.25%.