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Motif of the Week: Interest Rates Aren’t Waiting On Fed

9 November 2015 in Trading Ideas

Federal Reserve Chairwoman Janet Yellen grabbed attention last week when she said a boost to the central bank’s benchmark interest rate was a “live possibility” at the Fed’s December meeting. While Yellen’s message was couched in the caveat of the economy continuing to perform well, her words immediately sparked the yield in two-year Treasury notes to their highest level in more than four years.

But guess what – interest rates of all durations have already been climbing. Ahead of last week’s jobs report, the 10-year Treasure yield hit a seven-week high, as federal funds futures are now predicting a 58% likelihood that the Fed will boost rates next month.

The recent trend in yields and the ramped-up Fed focus make it a good time to anoint Rising Interest Rates as our Motif of the Week. Beginning today through Friday, Nov. 13, you can trade this motif, commission-free.

Why wait for December?

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Binyamin Applebaum, “December Interest Rate Increase Is a ‘Live Possibility,’ Yellen Says,” nytimes.com, Nov. 4, 2015, http://www.nytimes.com/2015/11/05/business/economy/fed-yellen-congress-interest-rates.html?_r=0.

Min Zeng, “US 10-Year Yield Closes at Seven-Week High Before Jobs Data,” wsj.com, Nov. 5, 2015.

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