Me: “Let’s find companies with lots of debt and buy them. And make a lot of money.”
You: “Wait, what?”
(Nod as always to the late, great Norm Macdonald.)
Hear me out. Last week, plain vanilla investors threw a midweek fit when Federal Reserve Chairman Jay Powell said something we contrarians assumed already: No rate cut coming in March.
The Fed decides the Fed funds rate. This often cues the two-year Treasury yield to follow. (Yes, sometimes, the two-year leads. As always in economics and relationships, it’s complicated.)
We can debate who leads who, but the key is that the Fed controls short-term rates, but the bond market determines long-term rates.… Read more
Recent Comments