Because the market decided the price went up too much before based on the future that was anticipated in the before time that was no longer anticipated in quite that way in the now time.Can anyone explain why bond fund price can decline when interest rates go down?
The market wasn't just pricing in the Sept rate cut - it was also pricing in future rate cuts. And after the Sept rate cut, some things happened and reports came out, and it started to look like the future rate cuts that had been priced in wouldn't be as large or fast as market participants were thinking they would be previously. So the price adjusted in line with new expectations of the future.
It's not "if X, then Y".
It's more like "if X is anticipated, then Y".
Statistics: Posted by Beensabu — Thu Oct 10, 2024 10:03 pm