The Fed Cut. The Degens Cheered. The Bond Market Shrugged.
Rate cuts are back and everyone has already priced in six more. The two-year believes. The thirty-year has some questions.
The Fed delivered the cut everyone demanded, and risk assets did the thing they do. Crypto up, small caps up, unprofitable tech up the most, obviously, because nothing says lower discount rate like a company with no earnings to discount.
The interesting action was further out the curve, where the long end barely moved and occasionally moved the wrong way. Translation: the front of the curve is trading the Fed, the back of the curve is trading the deficit, and those are two different conversations that happen to share a yield axis.
For the degen audience the takeaway is simple: cuts are fuel, but they are fuel because things are slowing, and there is a fine line between the Fed has your back and the Fed knows something you do not. We plan to dance on that line until it moves, like everyone else.