An immediate lesson should have been more reminder that surfaced after the Federal Reserve cut the federal funds rate range by 50 basis points wnot all rates move in tandem.
One might expect a short end of the Treasuries, like the 3-month yield, to be sensitive to the federal funds rate, and it was. First in anticipation, falling from 5.19% at the start of September, sliding to 4.95% the day before the announced cut that everyone expected would happen, and then an 11-basis-point drop at the close of the 18th. And the secure overnight financing rate, or SOFR, went from 5.38% on September 17th to 4.82% on the 19th.
But the yield on the 10-year Treasury was different. September 3, 2024, started at 3.84%. The day before the announcement, it was 3.65%. After, it jumped to 3.70% and then ended Monday, the 23rd, at 3.75%.
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