Bond market did a complete 180 this year.
January: pricing in 2 rate cuts
Today: pricing in 1-2 rate hikes
That's almost a full percentage point swing in expectations in just a few months.
This is why you don't position your entire portfolio based on what the market "expects" the Fed to do. Consensus changes fast. The crowd is usually wrong at the extremes. And by the time everyone agrees on something, it's often already priced in or about to reverse.
Stick to what you can control: your time horizon, your risk tolerance, your discipline. Let the bond traders panic-adjust their models every quarter.
January: pricing in 2 rate cuts
Today: pricing in 1-2 rate hikes
That's almost a full percentage point swing in expectations in just a few months.
This is why you don't position your entire portfolio based on what the market "expects" the Fed to do. Consensus changes fast. The crowd is usually wrong at the extremes. And by the time everyone agrees on something, it's often already priced in or about to reverse.
Stick to what you can control: your time horizon, your risk tolerance, your discipline. Let the bond traders panic-adjust their models every quarter.