In our industry, we are intensely focused on data and the story it tells. At times, it shouts loudly, while other times, it only whispers.

We closely monitor technical indicators, particularly the 10-year and 2-year Treasury Notes. Until this week, the 2-year Treasury yield had been higher than the 10-year for an unusually extended period—longer than at any point in history.

If you’re holding a bond for a longer term, you’d typically expect higher yields as compensation. However, over the past two years, we’ve seen an inverted yield curve, with the 2-year bond offering higher yields than longer-term bonds.

With regards to the September 18th Fed meeting:

Yields goes down on average of 1.5% from the first Fed cut to the last. This would optimistically bring the 10-year bond down to 2.2% from its current 3.7%.

Below is the Bond activity over the last two months. Up or Green is lower rates. We expect this to continue through next week.