In a surprise move, the US Fed cut interest rates by 50bps to the 1-1.25% range. At the same time, the yield on the 10-year US Treasury note fell below 1% for the first time ever. There is a market saying that goes “If the Fed cuts rates and bond yields rise, the market believes in the Fed’s stimulus measures and that economic growth will benefit”.
As bond yields have fallen further, the market obviously does not believe it. The next US central bank’s regularly scheduled meeting is for March 17-18 and fed futures now imply another 25bps rate cut.