Analysis: Investors may not be able to properly assess Fed actions before U.S. presidential election

Since the Federal Reserve slashed interest rates on September 18, long-term U.S. bond yields, inflation expectations and the "term premium" (the compensation investors get for buying long-term Treasuries instead of rolling over short-term Treasuries) have risen sharply. Given that former President Trump seems to be regaining momentum in the presidential campaign while touting a series of plans that could destroy the budget, this may reflect investors' concerns about fiscal profligacy and overly dovish monetary policy. Analysts at Bespoke Investment Group pointed out that during the first of the Fed's 35 rate cuts since 1994, the 10-year Treasury yield saw the third largest increase in history, second only to the same period in November 2001 and June 2008. Ultimately, it is impossible for investors to properly assess the Fed's actions before the presidential election on November 5. (Jinshi)