FED will now err again by overtightening?
"...After the Fitch Ratings' downgrade and the Treasury's plans to borrow $1 trillion, it's worth looking at other assets besides equities. The 10-year US Treasury Yield Index ($TNX) rose to the highest 2023 level as equities sold off. After the July jobs report, 10-year yields moved lower, but remain above 4%. This brings up the next pointmortgage rates. The 30-year fixed-rate mortgage is close to 7%, the highest rate in about two decades.
It's almost as if the forecast for how long the Fed will continue to raise interest rates keeps getting pushed out further. While some data seems to be trending in the right direction slowly, others seem to be supporting the idea that inflation is still around. If the 10-year yield hovers around 3.75%, it would be healthy for stocks, but if the 10-year yield continues to remain above 4%, stocks may sputter.
Another area to watch closely is crude oil. Price rose to the April 2023 levels, and, if price breaks above $84 a barrel, it could soar higher. If this happens, it could impact inflation, since energy is a large component of household expenses."
https://stockcharts...._eid=8d085491f3My TLT CALLS got hit hard but the UVXY CALLS helped partially
Building a big TLT LONG and will close some more UVXY CALLS on market declines
BUT THIS! Can FED raise rates with this? US 30-Year Mortgage Rates Rose Sharply This Week
According to Bankrate.coms data, the 30-Year fixed-rate mortgage reached 7.39% on Thursday, the highest rate since November 2000, but slightly dropped to 7.38% on Friday. This increase was driven by a notable surge in US Treasury yields, which serve as a reference for mortgage rates. The spike in yields was triggered by concerns among bond investors about an influx of government-debt issuance, the strength of the job market, and a downgrade of the sovereign credit rating. Additionally, Japans recent tighter monetary policy contributed to this trend. As Japanese long-term yields rose, the largest foreign holders of US Treasuries, Japanese investors, became less interested in US bonds and demanded a premium.