Education . Fixed Income . 3 of 4
The cut everyone expects is already in the price.
Your bonds are not priced off the repo rate. They are priced off the yield curve, and the curve bought the expected cut weeks ago.
What it does to a hybrid
debt move = allocation x duration x yield move
Aggressive hybrid . 25 pct debt . dur 3
0.25 x 3 x 0.25 pct = +0.19 pct NAV
Balanced hybrid . 30 pct debt . dur 4
0.30 x 4 x 0.25 pct = +0.30 pct NAV
Conservative hybrid . 70 pct debt . dur 5
0.70 x 5 x 0.25 pct = +0.88 pct NAV
What actually moves yields on the day
01
The surprise. Actual decision against what the curve had already priced.
02
The stance. Accommodative, neutral, or withdrawal. The path, not just the level.
03
The guidance. Inflation and growth projections, and the language on future cuts.
A 25 bps move that leads every headline lifts an aggressive hybrid by less than one average day in the equity sleeve. The debt side absorbs. It does not sprint.