10-Year Treasury Yield Rose 100 Basis Points since September as the Fed Cut 100 Basis Points. Why the Historic Divergence?

By Wolf Richter for WOLF STREET

When the Fed cut its policy rates by a full percentage point, long-term yields rose by a full percentage point.

The 10-year Treasury yield reached 4.62% on Friday, the highest since May 1, while the Effective Federal Funds Rate (EFFR), which the Fed targets with its policy rates, was 4.33%.

This equal move into opposite directions of the EFFR and the 10-year yield is amazing.

What does it mean, the Fed didn’t cut because it saw a recession coming