Bonds Undergoing a Bit of a Reset

Bonds Undergoing a Bit of a Reset

3 weeks ago, the Fed voted to cut rates by 0.50%.  Traders had rushed to get in position for that, so a small "reset" followed as the market waited for the most important vote.  The vote in question was on whether or not the market was ahead of itself in mid September and it was cast by last Friday's jobs report.  When marquis reports coincide with big changes in Fed policy, and when Fed policy changes had a lot to do with the past two examples of the marquis report in question, and when the marquis report not only offers a completely different message from the past two, but also revises the past two in a way that casts doubt on the extent of the Fed's decision, you get exactly what we've seen since Friday morning.  It's a firm rejection of mid-September's rates and a wake-up call that rates can still move higher, but not the same sort of watershed moment seen in 2013 before the taper tantrum.  Barring unforeseen exogenous shocks, we'll now need another weak jobs report (or two or three) before re-challenging the mid-September floor.