We've Been Focusing On The Wrong Fed Policy Error

Summary The Fed raised the Fed Funds Rate by 25 basis points to 3.75%–4.00%, the first hike in three years. Despite rate cuts since September 2024, the 10-year Treasury yield has risen 130 basis points—unprecedented in 55 years. Market signals suggest the Fed's earlier rate cuts were a policy error, as bond yields climbed instead of falling. Chairman Warsh’s latest hike reflects a shift to heed market feedback, diverging from prior cycles. Funtap/iStock via Getty Images Fed Hikes Rates By 25 Basis Points Yesterday, in a unanimous vote, the Fed hiked the Fed Funds Rate by 25 basis points for the first time in three years. The new target range for This article was written by Michael Gray 2.96K Followers Follow Michael Gray has devoted his career to following the capital markets and managing fixed income assets. He founded Gray Capital Management LLC and before that was Head of Taxable Fixed Income at Fidelity Investments. Michael has an MBA in Finance from Wharton and a BA in Economics from Union College. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.