Why Price of 10Y Bonds went up Post-Cut
Can anyone succinctly explain why this happened? I am referring to September cut.
From what I have read online it is because the cut was already “priced in,” but obviously this does not tell the full story.
One theory is it’s the market pricing in continued deficit spending.
no exact answer here but few channels or frameworks to think through:
Wouldn't expected inflationary pressures lead to lower bond prices (in anticipation of higher rates)
yeah. generally speaking, upside inflation risks / higher rates being priced = higher yields and given yields move inversely to bond prices, lower bond prices
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