The concern of inflation not being slayed can be shown in the U.S. yields, which have only soared since the Federal Reserve started the rate-cutting cycle with a 50bps rate cut, followed by a further 25bps rate cut. Since the first rate cut on Sep. 16, the U.S. 10Y has jumped from 3.6% to 4.4%. With the U.S. 3-month treasury yield trading at 4.6%, which follows the effective federal funds rate, it’s suggesting that no more than 25bps of rate cuts will occur over the next three months, as the current target rate is 450 – 475.
