..it is hard to see smaller cap and zombie stocks and stocks with high debts to thrive under such environment.
It’s been 3 months since the Fed first cut rates and the 10-year Treasury yield is 86 bps higher, moving from 3.66% up to 4.52%. This is very different behavior than the start of previous cutting cycles where the 10-year Treasury yield either moved lower or stayed roughly the same. What is the bond market saying to the Fed? a) You may be done with inflation but inflation is not done with you, and b) the road back to the easy money policies of the past will not be an easy one.
