Why, if the FED rate has been going up, and a couple more hikes

[pangaia]

are, as of now, planned for 2019, did Treasuries and bank CD rates start dropping so fast in the last few weeks?

Thanks,

[juxtaposed]

1. running of the bulls?

[brush]

2. Where'd you get that? CD rates have been gradually going up.

[pangaia]

8. One example, my last 1 year Bank Of China CD paid 2.75%, bgt on 12/18

Today a 1 year Bank Of China CD pays 2.65%.
JP Morgan Chase(BOOO) was 2.7% but not call protected, so I bought a Wells Fargo (BOOO) at 2.65%-- 13 months..

[msongs]

3. bank savings all the way up to...ONE percent lol nt

[progree]

4. As stocks decline, people pour their money into safer investments like Treasuries

The S&P 500 high was Sept 20 (2931) ... and a very bad December -- from 2760 to 2507, a 9.2% decline in December.

A lot of people and institutions buying Treasuries pushes up their prices, which pushes down their yields. Yields move in opposite direction to prices.

Also, there has been some disappointing economic news in the last few days. Weaker economic expectations tend to push down yields.

Here's some Treasury yields. Note there wasn't a drop in yields over December for maturities less than a year, and even increases at the lower maturity end -- these are the most affected by changes in the Fed Funds rate.
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield

Also, before the December 19 Fed Funds rate hike, there were near-certainty expectations of the December hike, and expectations that there would be 3 rate hikes in 2019. These were to some degree already priced into the market.

In the December 19 meeting, expectations were reduced from 3 to 2 rate hikes in 2019, putting a bit of a downdraft on yields that would be affected by 2019 rate hikes (several months out and more).

People sell stocks on the dips when they should be buying on the dips.

[pangaia]

7. I kind knew the basics of that but didn;t realize it also applied to T-Bills and T- Bonds

Thanks

[PSPS]

5. Supply/demand. Investors pull money out of stocks and buy treasuries, so yields can go down.

[PaulX2]

6. I Have 2 Adjustable Loans The Fed Hikes Hurt Bad

My payment went from 1200 to 1800.

Not happy.

[progree]

9. That really sucks. It was rising interest rates that popped the 2007 housing bubble

It's not solely to blame, not by a long shot. There were so many excesses in the housing and mortgage markets before then -- liar loans for anyone who could fog a mirror, the bond rating agencies like Moody's and S&P rating bundles of these mortgages as AAA, mortgages sold with low teaser rates and people were qualified based on these low teaser rates, and not the rates they would be paying 2 years later after the teaser period was over, derivatives, etc. etc.

So there was a huge huge bubble waiting to burst. But the pin prick that burst the bubble was the rising interest rates that caused ARM mortages to adjust upward and upward and defaults began accelerating and boom.