#US2YearYieldRisesTo4.61%
The yield on two-year Treasury bills sends a signal that digital currency traders should not ignore.
It rose to about 4.63% this week, as the odds of the Federal Reserve raising interest rates at its September meeting grow stronger.
But I believe the interesting story is bigger than just “a hawkish shift from the Fed.”
The Consumer Price Index (CPI) for August rose 0.4% month over month and 3.4% year over year. The Core CPI increased 0.3% monthly and 2.4% annually. The monthly core inflation reading came in slightly higher than expected, and oil prices above $100 added another potential source of inflation pressure.
Markets reacted quickly. The probability of a 25-basis-point rate hike in September moved toward 86%, while the two-year Treasury yield reached 4.63%.
The most important issue is the opportunity cost of capital.
When short-term Treasuries increasingly offer attractive yields, investors have less incentive to push further out along the risk curve. This may mean that
This does not automatically imply a negative crypto outlook.
Am I reading this incorrectly? Or does the bond market become an even more important signal for crypto?
Please follow up
$NVDAB
The yield on two-year Treasury bills sends a signal that digital currency traders should not ignore.
It rose to about 4.63% this week, as the odds of the Federal Reserve raising interest rates at its September meeting grow stronger.
But I believe the interesting story is bigger than just “a hawkish shift from the Fed.”
The Consumer Price Index (CPI) for August rose 0.4% month over month and 3.4% year over year. The Core CPI increased 0.3% monthly and 2.4% annually. The monthly core inflation reading came in slightly higher than expected, and oil prices above $100 added another potential source of inflation pressure.
Markets reacted quickly. The probability of a 25-basis-point rate hike in September moved toward 86%, while the two-year Treasury yield reached 4.63%.
The most important issue is the opportunity cost of capital.
When short-term Treasuries increasingly offer attractive yields, investors have less incentive to push further out along the risk curve. This may mean that
This does not automatically imply a negative crypto outlook.
Am I reading this incorrectly? Or does the bond market become an even more important signal for crypto?
Please follow up
$NVDAB
