Despite yesterday's rate cut and significant moves higher in long-dated treasury yields, numerous inversions remain.

Fed Fails to Un-Invert Yield Curve

Huge portions of the yield curve remain inverted, just not as deep as a few weeks ago.

At the long end, the 30-year bond yield rose from 1.938% on August 28 to 2.375 on September 15.

Today, the long bond yield is now back to 2.22%.

Fed Struggling with Rates

The Effective Fed Funds Rate should be in the range of 1.75% to 2.00% following yesterday's cut but it isn't.

Yesterday, the rate should have been in the middle of the range of 2.00% to 2.25% but was at the high end. On Monday it was at 2.30% and thus outside the range.

The Fed has been struggling for day keeping interest rates in its target range.

On September 17, I noted US Overnight Interest Rate Surges to 10%, Fed Injects Emergency $75 Billion.

10% is more than a bit outside the range but the effective FF rate closed at 2.30% following emergency injections. The emergency injections continued for a third day today and will continue for a fourth day tomorrow.

Something is very wrong somewhere.

This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD struggling around 1.13 as stocks fall

EUR/USD is trading around 1.13, off the highs as concerns about coronavirus and the court decision to hand Trump's financial to a grand jury trigger political uncertainty. US jobless claims beat expectations.


GBP/USD pressured toward 1.26 as the market mood worsens

GBP/USD is trading around 1.26, off the highs. The risk-off mood has pushed the dollar higher and is weighing on GBP/USD. UK fiscal stimulus and Brexit are also in play.


Gold: $1800 is being used as the intraday support for XAU/USD

Gold has retraced on Thursday during the US session after the recent impressive rally. At the moment the market is grappling with the USD 1800 per troy ounce psychological level. 

Gold News

Altcoin season confirmed

Second-line Altcoins take turns offering explosive price hikes. Bitcoin is giving up ground in the struggle for dominance, but it is not Ethereum that collects the profits. Ripple manages to enter the safe zone and bets on the upward continuity.

Read more

WTI: Rounding bottom on hourly chart highlights $41.15

WTI stays mildly bid above $41.00 while remaining above 100-HMA. Multiple failures to cross $41.15 confront a bullish chart formation on a short timeframe. June month’s top, February low will be on the buyers’ radar after a successful break.

Oil News

Forex Majors