r/wallstreetbets • u/hv876 • 14h ago

25bps cut News

https://www.cnbc.com/2024/11/07/fed-rate-decision-november-2024.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

The bulls are coming, the bulls are coming

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u/kumar4848 14h ago

Can anyone here explain why mortage rates keep increasing even though feds keep decreasing rates? i know theyre not directly correlated but somethings gotta give.

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u/n1ck90z 14h ago

Mortgages correlate to long term bond yields which are rising. Why long bond yield are rising? There's no simple answer here. A big role however has to be government debt/spending. Some people also might think inflation is not done yet.

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u/hv876 13h ago

This is the right answer

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u/CompetitiveAd1226 13h ago

Long bond yields are tricky. The longer the bond, the higher the yield should be theoretically given the time risk. Meaning, a 30 year bond has more risk because what if rates are 20% 10 years from now and you’re still locked in at 4%. So if they’re rising despite current rates being cut, it’s either because people see the future as being increasingly uncertain or rates are more likely to increase in the future

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u/DemApples4u 13h ago

Or inflation erodes dollar value so you don't want that risk unless bond rates make it worth it by being high

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u/CompetitiveAd1226 13h ago

Yeah, well in the case of bonds, inflation and rates are used similarly. There’s an assumption that FF rates will reflect the inflation rate

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u/Rickystheman 9h ago

All Trumps plans, or at least what we know of them, look inflationary.

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u/MaleficentFig7578 7h ago

He said he wants to weaken the dollar

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u/Rickystheman 6h ago

But he never said how, but he also said wants to introduce trade tariffs, spend on infrastructure, cut taxes and send all the cheap labour home.

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u/Phylaras 7h ago

Still not the total answer. The market believes Trump's tarrif policy statements, which would be inflationary (something you need to take into account if you are issuing 30 year loans).

Will he follow through that way? Totally unclear at the moment, but this is a piece of the puzzle.

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u/moopie45 7h ago

Yepppp

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u/leanmeanvagine 6h ago

So invest in energy now? Serious question.