Summary:- The Federal Reserve left rates unchanged on Wednesday but signalled an openness to lowering interest rates in the future.
- However, our analysis of the market cycles for Treasury Note Yields (TNX) suggests a near-term increase in yields.
CBOE 10-Year Treasury Note Yield Index (TNX) Weekly Chart
The Federal Reserve did not raise interest rates at its June meeting, with the committee voting 9-1 in favor of the decision. However, they removed the word “patient” from the description of their stance on rate changes. This signaled they were open to reducing rates in the future.
Furthermore, Chairman Jerome Powell signalled further openness by saying that, “Many participants now see the case for a somewhat more accommodative policy has strengthened.”
Our analysis focuses on the market cycles for TNX. The chart suggests that TNX is completing the declining phase of its current cycle, which implies it will begin the rising phase once the next cycle begins. Our projection is for yields to return to yields of 2.25% for the near term.
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