This is the 10 year yield that I have been talking about for some time. This break of the uptrend moving average is due to quickly slowing growth.
It doesn’t mean a disaster but I do believe it confirms that the Fed is behind the ball here (as I said in my last piece). They should have begun their cutting cycle yesterday because they are way too restrictive for this environment.
Fiscal spending has been holding us up for some time but that is waning and with our current budget deficit running roughly one third of our total annual spending I am not sure that more firepower will be coming.
Good news is corporations have kept themselves in mostly good shape but even they are noticing the softness (listen to the conference calls for various airlines and even McDonalds recently).
To use an analogy from my Gretzky piece, it’s time for the Fed to get to the puck.
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