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2/5 The chart below shows the 10-year yield since September 18th, 2024, when the Fed started cutting rates with a 50 bps move. In total, they’ve cut rates by 175 bps, with the last cut coming on Dec 10th, 2025. The 10-year yield is 98 bps HIGHER during this period. https://t.co/n9ZkAHso3Z 3/5 How unusual is it for rates on the long end of the curve to rise during a cutting cycle? First, what are the cycles? Below shows several cycles using the funds rate since 1988 and the discount rate before that, going back to 1971. It shows 55 years of Fed cycles. https://t.co/XGksIfYSqd 4/5 Next shows the change in the 10-yr yield from the beginning of a cutting cycle to the day before the next hike. The black line above shows the current rate-cutting cycle. The 10-yr yield is 98 bps higher than it was on Sept 18, 2024, when the Fed started cutting rates. https://t.co/kgUcTXJChe 5/5 Only one other rate-cutting cycle of the last 50+ years saw the Fed cut and 10-year yields soar higher: the 1980 cycle (orange above). But that one lasted only 119 days. The Fed cut from 13% to 10%, and then, when yields soared, it immediately stopped and started hiking. For the Fed to cut six times over almost two years (693 days) without a hike and have 10-year yields soar almost 100 basis points higher (30-year 125 basis points higher) is unprecedented. Can the bond market scream any louder, “Wrong policy!”? Its response has to raise long-term yields while the Fed has been cutting, or the bond market is doing what the Fed should be doing. -- "Bond traders can stop panicking when the Fed starts panicking." So, to stop rising long-term yields, maybe the Fed should introduce a little bit of "panic" about inflation so the bond market can stop panicking. Follow up on above ... September hike as priced by fed fund futures 51% = Hike 25 bps 49% = no move 0% = Cut rates https://t.co/iZciFHjIz7