Talking Interest Rates.
So which way are they headed?
Short rates: <10 years...up
Intermediate rates: 10 year...Short timing signal towards higher rates, but the longer (much more important) buy/sell pivot point is barely pointing to lower yields on the 10 year.
As it stands today, IEF is 4% (or 50%) of maximum exposure.
If the cross occurs (which could well happen this week) IEF will fall to 0% and TBX (10 yr. UST short) will move to 8%. If this happens money will flow from the winter loving IEF to spring loving TBX.
Long rates: +20 years. With the curve flattening, TLT still remains a hold at a full 8% with both the short and long pivot points suggesting lower long term rates.
On the very short end, FF rates, If the Fed raises rates 1/4 in Dec, I'll have them removing every last bit of accommodation based on my modified Taylor Rule using factory utilization and core PCE inflation numbers.
Any further rate increase, unless it's preceded by higher capacity utilization and/or higher inflation would be contractionary bringing the economy and market down.
