A rate cut should have been great news—but the bond market had other ideas. In this week’s Master the Markets, Bill Bodnar breaks down what really happened after the Fed’s latest rate cut and why mortgage bonds stumbled even as policy eased. The surprise? Jerome Powell’s post-meeting comments: a December rate cut “not a foregone conclusion.” Markets didn’t like the uncertainty, but the reaction proved short-lived.
By week’s end, the 10-year Treasury yield held under 4.10%, a key technical level, and mortgage-backed securities clawed back from their worst levels. Bill explains why the broader bond trend still points toward lower rates—but with key levels now being tested, vigilance is essential.
