PolicyFed Watch: Traders Bet on a Pause, but 10Y Yields at 4.23% Disagree
Bond markets are challenging the equity bull case ahead of the Jan 27-28 FOMC meeting, pushing the 10-Year Treasury Yield to 4.23% even as traders price in a policy pause at the 3.50-3.75% range. The market is currently defined by a high-stakes tug-of-war: rising yields are actively compressing equity risk premiums, yet robust Q4 earnings expectations—specifically the +25% YoY growth forecast for Technology—are providing a critical valuation floor. While the S&P 500 ([[GSPC]]) drifts, institutional rotation is evident in the outperformance of quality value names like IBM (+2.59%) and American Express (+2.08%). The variant view lies in commodities: Silver has surged +25% YTD, massively outperforming Gold (+5%), signaling a unique confluence of industrial demand and monetary hedging that consensus may be overlooking. The immediate risk: if the 10-year yield breaches technical resistance at 4.25%, expect a rapid repricing of risk assets regardless of the Fed's "wait-and-see" signaling.