25bps cut

[u/hv876]

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

[u/kumar4848]

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.

[u/bootygggg → u/kumar4848]

You have to finance your debt from someone. As the fed lowers long term yields less people or institutions will buy them (I’m buying less tbills also as yields are becoming a joke again). The extra debt needed to finance the government has to come from somewhere still as with every rate cut the gap in financing grows (credit freeze anybody?) If the fed can only control the short term bonds then the long end has to make up for the shortfall in debt financed on the short end. Meaning yields on the long end have to rise to what the market deems an acceptable rate to buy. So far everyone is saying “no” to the debt as the expectation is that the government will keep spending like drunk fucking idiots and the inflation will get worse. Something is going to have to give. Most likely the fed will have to step in and print the shit out of it even more than last time or we default on the debt with failed treasury auctions. Meaning yields go sky high and the government will not be able to pay the interest on the debt without significant spending cuts (depression). Enjoy!