The Impact of Federal Reserve Decisions on Treasury Rates

TLDRThe former Dallas Fed president and senior adviser at Barclays, Richard Fisher, shares insights on the impact of Federal Reserve decisions on treasury rates. He suggests that the market should focus on the treasury auctions and the supply and demand dynamics rather than solely relying on the dot plot. Fisher believes that the high levels of treasury rates are influenced by the treasury's issuance, and that the Fed is unlikely to let inflation run hot.

Key insights

📈The market should pay attention to treasury auctions and supply and demand dynamics, rather than solely relying on the dot plot.

💰The high treasury rates are influenced by the treasury's issuance and the supply of treasuries in the market.

🔍Investors should focus on the smoke (treasury auctions) rather than the locomotive (Federal Reserve decisions).

📉Treasury rates are currently at elevated levels due to the issuance of treasuries and demand-supply dynamics.

💡The Federal Reserve is unlikely to let inflation run hot, as its primary goal is to bring inflation down.

Q&A

What should investors focus on when analyzing treasury rates?

—Investors should focus on treasury auctions and supply and demand dynamics.

What factors influence treasury rates?

—Treasury rates are influenced by the treasury's issuance and the supply of treasuries in the market.

Why are treasury rates currently at elevated levels?

—Treasury rates are currently high due to the issuance of treasuries and the demand-supply dynamics.

Will the Federal Reserve let inflation run hot?

—No, the Federal Reserve is unlikely to let inflation run hot, as its primary goal is to bring inflation down.

What should investors focus on instead of Federal Reserve decisions?

—Investors should focus on the treasury auctions and the smoke (supply and demand dynamics) rather than the locomotive (Federal Reserve decisions).

Timestamped Summary

00:00Richard Fisher, former Dallas Fed president and senior adviser at Barclays, shares insights on the impact of Federal Reserve decisions on treasury rates.

00:08The market should focus on treasury auctions and supply and demand dynamics instead of relying solely on the dot plot.

00:24Treasury rates are currently high due to the treasury's issuance and the supply of treasuries in the market.

01:03Investors should pay attention to the smoke (treasury auctions) rather than the locomotive (Federal Reserve decisions).

01:39The Federal Reserve is unlikely to let inflation run hot, as its primary goal is to bring inflation down.

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