This happens to be an actual exclusive photograph of Jerome Powell dropping into a big wave that’s about to get even more powerful. To ride something like this out you’ve got to know what you’re doing and have a fair amount of confidence in how things will play out. Jerome & Co left the Fed Funds Rate unchanged today and added that a cut in March is also unlikely until the FOMC has “great confidence” that inflation can sustainably be maintained a 2.0%. For the year 2023, GDP ended at 3.1% growth, so we need to see that increase reduced by just over 1/3.
The FOMC will continue its “restrictive” policy with a higher Fed Funds Rate, and maintain longer-term rates elevated by selling off enviable portfolio. So far in the last year they’ve sent over $1trillion to auction already.
The knee-jerk reaction in the bond market sent the 10 Year yield down .14% to rest now at 3.92%. With no movement in the Two Year, that sends the 2-10 spread back down to -0.31%. and puts the economy further away from a “normal” yield curve. With today’s policy in place, the wave of economic uncertainty will gain even more momentum and make that soft landing all the more impressive when it happens.
Mortgage rates are initially down 1/8% this afternoon. We’ll see how the market wakes up in the morning. 
