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Want to know where short term interest rates are headed? Normally the cash markets take a cue from the Federal Reserve, and their moves point the way. When the Fed  embarked on its tightening path in early 2022 rates in the three- to 12-month area  jumped in advance of Fed moves to raise the overnight rate. Similarly, when the Fed began easing in the fall of 2024 the markets responding by pushing down yields across the board.

As we’ve observed a few times, this cycle seems different, and last week’s market moves can be Exhibit A. While LGIP and money market yields moved sharply lower after the Fed eased by 25 basis points on October 29, yields of investments with maturities from three to 12 months actually have risen. Not by a lot, perhaps, but the anomaly is notable. Call it lack conviction, call it lack clarity, but it is certainly unusual.