The Fed cutting over 100 basis points while long-term yields rose significantly is nearly unprecedented in 60 years.

The Federal Reserve signaled that additional tightening may still be required following the September 2026 rate hike.

“Just yesterday the Federal Reserve delivered this week's defining event raising rates for the first time since 2023 while also signaling that additional tightening may still be required.”

The current episode of the Fed cutting rates by over 100 basis points while long-term yields rise significantly is unprecedented in the last 60 years, even when adjusted for the high level of rates in the early 1980s.

“There's only one time in the last 60 years that we saw anything like that. The Fed cut by over 100 basis points and yields went up by a significant amount. That was the early 1980s, but we also had 14% interest rates back then. So, this if you wanted to discount that for the high level of rates, this is really unprecedented.”