I still don’t think the Fed is close to a rate hike, but for the upcoming June FOMC meeting, a shift in the language of the policy statement from an easing bias to one of a ‘balanced’ outlook seems to be the most likely scenario. However, the fed funds futures market has now fully priced in a rate hike for March 2027, a remarkable shift from its pre-war status of discounting almost three rate cuts for the same timeframe.

Stocks’ rally off the March 30 lows has been nothing short of wild, with internal market dynamics showing some performance divergences that we haven’t seen for decades. For example, in the first 6 weeks of the rally, the S&P 500 Growth index beat the S&P 500 Low Volatility Index by more than any other 6-week window on record.

Typically, an investor’s traditional bond portfolio begins with a cornerstone, or core holding of some sort. From either a strategic or tactical perspective, a core fixed income position provides the investor with some ballast to help anchor any other strategies that may be included.

The April FOMC meeting’s four dissents and resistance to maintaining an easing bias signal a higher bar for rate cuts under incoming Chair Warsh, suggesting investors may favor Treasury floating-rate strategies to navigate a prolonged “higher-for-longer” environment.

While the Middle East war takes on the lion’s share of headlines, and rightfully so, there has been another development in bond-land that has gone relatively unnoticed. Indeed, one concern that crops up in the U.S. Treasury (UST) market is the potential for higher budget deficits from the already lofty current reading.

The stock market would love to see nothing more than the labor market holding up. Time and again, we find monetary policy having a beautiful, lagged effect in the jobless claims series. We are of the view that the cumulative 175 basis points of Fed rate cuts that hit the market in 2024 and 2025 is exactly what the labor market needs in 2026-2027. We will soon find out if manufacturing employment continued to mend in April.

For the third consecutive policy gathering, the Federal Open Market Committee (FOMC) decided to remain ‘on hold,’ keeping the fed funds trading range at 3.50%–3.75%. This result was largely expected by the markets. Unfortunately for the Fed, the policymakers are in a challenging position of juggling incoming economic and inflation data as well as the uncertainties emanating from the Middle East war.

The Middle East war has replaced tariff-driven inflation concerns with fears of rising energy prices feeding through the economy. On Friday, the Bureau of Labor Statistics (BLS) released its March CPI report, when markets received their first ‘official’ glimpse of how the surge in energy prices has begun to impact the U.S. inflation setting.

Developments in the Middle East continue to be, without a doubt, taking center stage for the financial markets. However, it’s important to keep tabs on the U.S. macro-outlook, especially the labor market and inflation aspects.

At the risk of leaving aside the flow-through of the crude oil price into expenses such as electricity, trucking, and so on, let’s just look at the pocketbook hit from filling up the family car specifically.

The FOMC held the fed funds rate at 3.50%–3.75% for a second straight meeting as policymakers weigh slowing growth, persistent inflation, with core PCE at 3.1%, and geopolitical uncertainty from the Middle East.

A surprise 92k decline in February nonfarm payrolls and a rise in the unemployment rate to 4.4% signal some labor market softening, though stronger ISM manufacturing and services readings and still-low jobless claims suggest the broader U.S. growth backdrop remains intact.

Prior to the conflict in the Middle East, the U.S. financial markets were being confronted with headlines and attendant concerns surrounding the credit markets.

After peaking above 114 in September 2022, the dollar index has spent the last several years drifting lower, touching 96 a few weeks ago before stabilizing at 97.68 as we write. Much of that move has stemmed from weakness relative to the euro specifically.

Kevin Warsh’s nomination for Fed Chairman initially reassured bond markets by offering a known, crisis-tested Fed veteran with a reputation as an inflation hawk, reducing uncertainty at a critical juncture for monetary policy.

The mid-term elections are still more than eight months away, but that hasn’t stopped stories and headlines being posted about possible outcomes and what are perhaps the main drivers come voting day. Without a doubt, the number one issue appears to be the notion of affordability, and of course, what plans do the Republicans and Democrats have in store to address this issue.

The near-perfect timing of gold breaking through $5,000 while silver sliced through $100 has grabbed the market’s attention.

While the breaking news regarding the Fed receiving subpoenas from the Department of Justice will no doubt garner the lion’s share of Fed-related headlines in the days and weeks ahead, we wanted to roll the clock back and delve into what the markets should be looking at in terms of upcoming traditional monetary policy decisions.

We guess if you say something enough, a lot of people will start to believe it. The current refrain is that the labor market is cold, weak, struggling. A Google search for “labor market” is eye opening. The first five headlines use the words ‘weakened,’ ‘troubling,’ ‘risky,’ ‘slowing,’ and ‘warning signs.’

Join the experts at WisdomTree for an educational webcast covering the biggest takeaways from the final FOMC meeting of 2025 and how to set yourself up for success in 2026.

Despite the concern post-2024 election about rising U.S. deficits and a potential return of "bond vigilantes," the supply side of the Treasury market has remained stable, with deficits settling near the $1.8 trillion baseline.

This article questions if the high valuation multiples are justified, arguing that investors will soon need to see actual cash flow results from this massive CapEx bonanza.This aggressive spending has caused their collective free cash flow growth to turn negative, raising concerns since stock valuation is based on future free cash flow.

With the federal government shutdown now over, until the end of January at a minimum, the money and bond markets have turned their attention back to the Fed. Specifically, the conjecture is centered on whether another rate cut will be forthcoming at the December 10 FOMC meeting.

The Fed can turn QE back on like they did in the latter part of 2019, most likely by buying T-bills. It is important to note that this would be purely a technical mechanism for the funding markets and not a dual mandate monetary policy consideration.

Join the experts at WisdomTree for an in-depth look at the broader macroeconomic picture and a product due diligence session covering practical strategies for dealing with the challenges ahead

The age-old question in fixed income is when should I go long duration? Over the last two years, this has been an ongoing query for investors. More recently, with the Federal Reserve resuming rate cuts, it has come back on the front burner for sure.

The Federal Reserve’s October rate cut, to 3.75%–4%, signals a continued “risk management” approach, with December’s policy path tilting toward another cut.

Join the experts at WisdomTree for an educational webcast that explores the current realities of the market, looks at where equity opportunities could emerge, and unpacks how to position fixed income portfolios as rates change.

Part of the reason behind Japanese stocks’ discount to the U.S. is the profitability gap; the U.S. has a Return on Equity (ROE) of 18.3%, while Japan’s broad market has yet to break above 10% on that measure (though some forecasters believe Japan will get its act together).

Up to now, the Federal Reserve and the bond market have been operating under the assumption that the employment setting has been cooling in a somewhat visible fashion. In fact, recent comments from Powell & Co. underscore how the employment aspect of their dual mandate is where the greater risk may lie.

As the calendar has now turned squarely into Q4, the sweepstakes for who will be nominated as next Chair of the Federal Reserve will no doubt increase.

The financial markets have been laser-focused on upcoming policy decisions from the Fed, and rightfully so. Following the resumption of the current rate cut cycle, investors have been wondering what exactly this second phase will ultimately look like.

Join the experts at WisdomTree for a product due diligence session focused on their active-passive barbell approach to income.

With official economic data on pause during the government shutdown, investors are left with limited visibility. Kevin Flanagan explains how markets are leaning on private sources and Fed signals to fill the gap.

Market sentiment has come a long way since the Tariff Tantrum. Earlier this year, the VIX volatility index shot up into the 60s, a fear level previously seen in such episodes as the October 1987 crash and during 2008’s rolling bank insolvencies.

Although the Fed does focus on its dual mandate of employment and inflation, there is no question that the primary focus right now is on the employment side of the equation, especially given the recent stalling out in new job creation.

One question we’ve been fielding quite a bit of late is what do you think the Treasury (UST) yield curve will do?

It’s no understatement to say this could have been the most anticipated jobs report in quite some time.

Nvidia made a splash last week, or maybe an anti-splash, when it reported earnings and stated an intention to buy back $60 billion in stock.

Following the softer-than-expected July jobs report, the money and bond markets have fully embraced the narrative that a Fed rate cut will be coming at the September FOMC meeting.

It happened quickly. One minute, the focus was on the furious nature of stocks’ rebound off the April 8 lows. The next minute you start hearing strategists, including ourselves, making references to 2021.

For the fifth meeting in a row, the Federal Open Market Committee (FOMC) decided to keep rates unchanged, leaving the Fed Funds trading range at 4.25%–4.50%.

One of the more storied headlines this year has been President Trump’s disappointment with the Fed for not cutting rates. We should all know by now that the President cannot fire a Fed Chair simply because he/she is not lowering interest rates to their liking.

It wasn’t too long ago that you could confidently proclaim that most of the Street was ebullient, maybe even wildly so, with respect to the greenback’s prospects.

For the fourth meeting in a row, the Federal Open Market Committee (FOMC) decided to keep rates unchanged, leaving the Fed Funds trading range at 4.25%–4.50%.

In the current land of uncertainty the markets and investors find themselves in, the monthly Employment Situation report is ‘must-see TV’ and will remain that way for the foreseeable future.

With tariffs toggling on and off and a major tax bill still in flux, investors should brace for headline-driven volatility through July, particularly around trade and fiscal policy.

Remember last July and August when the yen carry trade blew up? At the time, the central bank surprised the market by signaling a faster pace of rate hikes than expected. Investors sold foreign currency, bought back yen and sent markets into a tailspin.

What investors thought was going to be a nice start to a weekend in May got turned around with a late Friday announcement that Moody’s had just downgraded the U.S. long-term credit rating.

After a brief reprieve from all the recession talk while the Fed was raising rates to decades-old high watermarks, the ‘R’ word has come back into vogue once again post-Liberation day.