Reading Tea Leaves

I think that the Daily Treasury Yield Curve Rates predict when the Fed will drop or raise rates.  See the following chart:

	Rate	3 month	6 month	1 year	2 year	3 year	5 year	7 year
Jun 21, 2019	2.40%	6	6	6	6	6	6	6
Sep 21, 2019	2.40%		6	6	6	6	6	6
Dec 21, 2019	2.40%			6	6	6	6	6
Mar 21, 2020	2.15%			5.375	5.375	5.375	5.375	5.375
Jun 21, 2020	2.15%				5.375	5.375	5.375	5.375
Sep 21, 2020	2.15%				5.375	5.375	5.375	5.375
Dec 21, 2020	2.15%				5.375	5.375	5.375	5.375
Mar 21, 2021	1.90%				4.75	4.75	4.75	4.75
Jun 21, 2021	2.15%					5.375	5.375	5.375
Sep 21, 2021	2.15%					5.375	5.375	5.375
Dec 21, 2021	2.15%					5.375	5.375	5.375
Mar 21, 2022	2.15%					5.375	5.375	5.375
Jun 21, 2022	2.15%						5.375	5.375
Sep 21, 2022	2.15%						5.375	5.375
Dec 21, 2022	2.15%						5.375	5.375
Mar 21, 2023	2.40%						6	6
Jun 21, 2023	2.40%						6	6
Sep 21, 2023	2.65%						6.625	6.625
Dec 21, 2023	2.65%						6.625	6.625
Mar 21, 2024	2.65%						6.625	6.625
Jun 21, 2024	2.65%							6.625
Sep 21, 2024	2.90%							7.25
Dec 21, 2024	2.90%							7.25
Mar 21, 2025	2.90%							7.25
Jun 21, 2025	2.90%							7.25
Sep 21, 2025	2.90%							7.25
Dec 21, 2025	2.90%							7.25
Mar 21, 2026	2.90%							7.25
Total interest paid		6	12	23.375	44.25	65.75	113.75	171.125
Num quarters		1	2	4	8	12	20	28
Total Annualized Return		2.42%	2.41%	2.34%	2.19%	2.15%	2.18%	2.28%
Actual as of 5/13		2.41%	2.42%	2.32%	2.18%	2.15%	2.18%	2.28%

I'm assuming a $1000 bond, with simple interest paid quarterly at the current rate.  I also assume that the current rate is 2.4% and it will go up or down in 0.25% increments.  So, we can see that the market is predicting the following changes:

On March 21, 2020, the Fed will cut rates by 0.25% to 2.15%.
On March 21, 2021, the Fed will cut rates by another 0.25% to 1.9%.
On June 21, 2021, the Fed will raise rates by 0.25% to 2.15%.
On March 21, 2023, the Fed will raise rates by 0.25% to 2.4%.
On Sept 21, 2023, the Fed will raise rates by 0.25% to 2.65%.
On Sept 21, 2024, the Fed will raise rates by another 0.25% to 2.9%.

The mystery isn't why long term rates are so low, it is why they are as high as they are.  A 7-year bond wants a 2.28% return, but this assumes interest rates higher than 2.4% for 11 straight quarters (from Sept 2023 onward), which is unlikely.

I think this is kind of cool and I will do this frequently and see if this changes.  I'm especially looking at the 3 year.

The formula I am using for annual rate of return is:
RR=((1000+TI)/1000)^(1/(NQ*0.25))-1
where RR is Rate of Return, TI is total interest, and NQ is number of quarters.