Despite anticipated interest rate cuts from the Federal Reserve, market expectations for future rate cuts have shifted due to Trump’s election.
The market now anticipates higher inflation driven by tariffs and fiscal stimulus, reducing the scope for further rate cuts.
Higher nominal bond yields are resulting in a steeper yield curve, and breakeven inflation rates have risen, with the 10-year breakeven rate jumping 10 bps, the highest since April.
What this all means for market volatility going forward, we’ll have to wait and see.
#EyeOnVolatility
