Yesterday the yield on the 10-year US Treasury bond fell again as money simply soared into safe havens even more. Yes, gold went up on Monday too and many mining stocks are now making new highs for the year.
This is where the action now is.
But the move in the bond market means that the Fed Fund futures market is now pricing in a 91.7% chance of a rate cut by the September FOMC meeting.
Those odds were at 50% just two weeks ago so that shows how quickly the macro environment is changing.
I know everyone is focused on the action in the S&P 500 and the fad tech stocks as they dumped really bad Monday and praying that this morning’s gap up is the bottom, but what is going on in the bond market now is the real interesting story – and more important for what it is telling us about the economy.
Here are the futures so you can see them for yourself.
And what is even is that the odds of a cut by the meeting at the end of July are now at 69%!
You can use this link to track the odds here.
Of it will take more losses in the stock market to make that 69% go over 90%. So if we bounce before this month is over it won’t happen – and I hope we do bounce for people.
What is more important though is that the odds are becoming certain that a rate cut is coming before this year is over.
Sometimes winning in the markets is about asking the right question.
So here is a question for you: what is most certain to go up as a result of coming Fed rate cuts?
The answer is not TSLA stock!
And it isn’t Google – now in the eye of the regulator.
The answer is gold!
And that is why gold is now going up and will keep going up as the year goes on.
It really matter to gold investors whether the first hike comes in July or September when they buy and it just goes up.
This is why I’m now eyeing silver for a potential explosive breakout in the coming weeks as I mentioned in my post yesterday. If you missed it read it here: