# What do you think the bond market could do if the fed cuts rates to 0.25% next year? **URL:** \ **Category:** Uncategorized\ **Created:** [July 6, 2022, 4:01am UTC](https://community.clark.com/t/what-do-you-think-the-bond-market-could-do-if-the-fed-cuts-rates-to-0-25-next-year/888 "2022-07-06T04:01:14Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![AustinBonds](https://avatars.discourse-cdn.com/v4/letter/a/6bbea6/32.png) [@AustinBonds](https://community.clark.com/u/AustinBonds)\ **Post date:** [July 6, 2022, 4:01am UTC](https://community.clark.com/t/what-do-you-think-the-bond-market-could-do-if-the-fed-cuts-rates-to-0-25-next-year/888/1 "2022-07-06T04:01:14Z")
Perhaps the bond market will price in recession fears and accompanying QE in ensuing months so much that it will be seamless a rise in bond prices. Suppose rates are cut dramatic amounts, 0.50% cut at a time. Current FFR is 1.75%. So, 3 major cuts at 0.50% each. This is all hypothetical. Reason I ask is that the NAV of my bond fund has suffered a lot since last year. A recession and QE would be another problem but wondering how much bond prices would possibly react. Let’s assume that federal fund rates between now and next year do not budge. ---
**Author:** ![ochotona](https://sea2.discourse-cdn.com/flex016/user_avatar/community.clark.com/ochotona/32/293_2.png) [@ochotona](https://community.clark.com/u/ochotona)\ **Post date:** [July 6, 2022, 7:47am UTC](https://community.clark.com/t/what-do-you-think-the-bond-market-could-do-if-the-fed-cuts-rates-to-0-25-next-year/888/2 "2022-07-06T07:47:24Z")
Bond futures indicate final hike could be Q1 23, to 3.5% then cuts. Whoopee, buy bonds at that point and hold them to maturity. I’m thinking of loading up on 2 year bonds in early 2023 then kicking the can forward until retirement in 2025… Then figure out how to deploy. The current market environment is just nuts. ---
**Author:** ![ochotona](https://sea2.discourse-cdn.com/flex016/user_avatar/community.clark.com/ochotona/32/293_2.png) [@ochotona](https://community.clark.com/u/ochotona)\ **Post date:** [July 7, 2022, 2:00pm UTC](https://community.clark.com/t/what-do-you-think-the-bond-market-could-do-if-the-fed-cuts-rates-to-0-25-next-year/888/3 "2022-07-07T14:00:46Z")
Commodities are getting hit hard, oil, copper, nickel. [Challenger Gray unemployment ticking up](https://www.fidelity.com/news/article/top-news/202207070845RTRSNEWSCOMBINED_KBN2OI12X-OUSBS_1). Atlanta Fed has negative real-time GDP indicator. The five year breakeven inflation rate is still quite low. [I don’t see this inflation lasting forever](https://www.fidelity.com/learning-center/trading-investing/is-inflation-peaking?ccsource=em_Promo_1028464_8_0)… the Fed may hike and cause a recession (if we are not in one already) then suddenly reverse course and lower interest rates. ---
**Author:** ![H200h](https://avatars.discourse-cdn.com/v4/letter/h/e79b87/32.png) [@H200h](https://community.clark.com/u/H200h)\ **Post date:** [July 7, 2022, 3:12pm UTC](https://community.clark.com/t/what-do-you-think-the-bond-market-could-do-if-the-fed-cuts-rates-to-0-25-next-year/888/5 "2022-07-07T15:12:22Z")
@AustinBonds… The answer to your question is in this book: > **[Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets...](https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219)** > > Buy Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto) on Amazon.com ✓ FREE SHIPPING on qualified orders ---
**Author:** ![ochotona](https://sea2.discourse-cdn.com/flex016/user_avatar/community.clark.com/ochotona/32/293_2.png) [@ochotona](https://community.clark.com/u/ochotona)\ **Post date:** [July 7, 2022, 9:23pm UTC](https://community.clark.com/t/what-do-you-think-the-bond-market-could-do-if-the-fed-cuts-rates-to-0-25-next-year/888/6 "2022-07-07T21:23:36Z")
So true for bonds. You have to be nimble and know what you want