Day gig is at a firm that extends consumer credit, so I keep an eye on cost of capital tracking, monitoring the spread, etc. Any debt packaged and sold into debt markets (asset backed securities) competes against treasuries from a yield (and risk premium pricing) spread perspective. Mortgages, auto loans, some credit card books, etc.
When the Fed cuts rates, your deposit account provider is going to start cutting your interest rate paid right away, but they’re going to maintain their credit rate pricing as long as possible (considering competition from other lenders) to maintain their spread and profit as long as possible. You see this with credit card interest rates, for example.
TLDR 10Y treasury sets the rate floor, broadly speaking.
Day gig is at a firm that extends consumer credit, so I keep an eye on cost of capital tracking, monitoring the spread, etc. Any debt packaged and sold into debt markets (asset backed securities) competes against treasuries from a yield (and risk premium pricing) spread perspective. Mortgages, auto loans, some credit card books, etc.
When the Fed cuts rates, your deposit account provider is going to start cutting your interest rate paid right away, but they’re going to maintain their credit rate pricing as long as possible (considering competition from other lenders) to maintain their spread and profit as long as possible. You see this with credit card interest rates, for example.
TLDR 10Y treasury sets the rate floor, broadly speaking.