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The Market Speaks—The Fed Follows

July 11, 2025

Everyone keeps assuming the Fed is done. That rates peaked in 2023. That the next move is down. That the cycle has run its course and we’re heading back to easy money.

But here’s the thing: the market says otherwise.

The 30-year yield has been grinding higher for most of 2025—not violently, not emotionally, just relentlessly

Quiet pressure. And when you see that kind of persistent strength at the long end, while the Fed Funds rate sits frozen? That’s not noise. That’s not a shrug. That’s a message.

And this pattern? We’ve seen it before. 

In 2018, the Fed hiked into weakness. The 30-year had already peaked, already started to roll over. The bond market was waving red flags. Powell didn’t listen. They pushed one step too far, broke the system, and were forced to reverse course.

The market knew first. The Fed caught up too late.

Then in 2024, it happened again—only flipped.

The Fed started cutting. But the 30-year? It didn’t follow. It rose. Why? Because that cut wasn’t about collapsing demand. It was politics. Optics. The long end sniffed that out instantly and started pricing in reflation, not recession.

While Powell was easing, the market was saying: “This isn’t over.”

And now in 2025, we’re right back in the same fight.

On one side: every strategist still betting on disinflation, soft landings, and rate cuts.
On the other: the bond market—the most honest part of the curve—pushing higher, pricing in sticky inflation and stronger-than-expected growth.

You want a signal? This is it.

There are levels that matter:

  • If the 30-year breaks above 5%, the market is saying loud and clear: cut rates and you’ll lose control.
  • If it drops below 4%, maybe the disinflation camp gets their breath. But we’re nowhere near that.

This is how I trade:
I don’t wait for press conferences.
I don’t wait for lagging data.
I follow price.

Because the market doesn’t lie.
And right now? The 30-year is telling you everything you need to know.

You want to know where we’re headed? Stop watching the Fed. Start listening to the curve.

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