The good, the bad and the ugly of life after rate cuts

But finding a gig proves particularly difficult for those without jobs or unhappy in their current ones.

Lower rates mean cheaper borrowing costs, which could prompt companies to start hiring again. But there is also a problem here. The key lending benchmark for everything from mortgages to corporate debt, the 10-year US Treasury yield, actually grew up yesterday.

This is because the market is forward-looking and has already started pricing in the rate cut ahead of the announcement.

It’s also not necessarily a bad thing. The slightly rising 10-year U.S. Treasury yield is a sign investors don’t expect a recession, as that would require the Fed to cut rates quickly, but it also means borrowers may not get much relief in soon.

Still confused? Here’s a full explainer on the dynamics between the Fed and the 10-year US Treasury yield.

Meanwhile, the stock market is loving this post-rate-cut environment.

Investors’ favorite trade of the past year, plus — artificial intelligence — was booming on Thursday. Shares of Nvidia, Broadcom and ASML rose. And the tech-rich Nasdaq ended the day up 2.51%.

Meanwhile, the S&P 500 and Dow Jones Industrial Average both closed at all-time highs.

The good times could continue if past Fed policy is any indication of future yields. The central bank’s strategy looks eerily similar to its approach to avoiding a recession in 1995, according to an economist.

Back then, the Fed cut rates from 6% to about 4.75% over three years. Along the way, it sparked an economic boom and sent the S&P 500 up 125%.

Meanwhile, the reduction poses unique challenges for both presidential candidates.

Former President Donald Trump played down the tapering as either a sign of how bad the economy is or an example of the central bank.playing politics.”

While Vice President Kamala Harris would normally celebrate the move as evidence of the economy turning around, this risks bolstering Trump’s claim. that it was a partisan movement.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, Editor-in-Chief, London. Milan Sehmbi, colleague, in London. Amanda Yen, colleague, in New York.