Behind the Markets Podcast · Friday, September 11, 2026
The two-year Treasury yield is reportedly 100 basis points higher than the Fed funds rate, which the speaker identifies as a significant market signal. This discrepancy, along with other yield curve slopes, suggests that the market believes the Fed needs to raise rates. Credit expansion data is also cited as confirmation of this market sentiment.
“Uh, Professor, the two-year is up to like 100 basis points higher than the Fed funds.”
“So like, uh, yeah, I know, and, uh, uh, Jeff, you know, like, look at the two year for where the Fed funds should be.”
“And, uh, so, you know, again, that's a market signaling that the Fed needs to raise prices, um, and, uh, uh, credit expansion, um, confirms that.”