2112, 2015

US Treasury Yield, 12-20-2015

By |December 21st, 2015|0 Comments

The Fed boosted its overnight rate by 25 bps last week, and now what? The rate the Fed pays on both required and excess reserves ($4 trillion) has increased from .25% to .50%, which is actually quite small relative to their annual revenues. Additionally, they voted to expand the capacity of their reverse repo facility […]

1412, 2015

US Treasury Yield Curve, Dec. 14, 2015

By |December 14th, 2015|0 Comments

Oil plunges below $36, stocks tank, bonds improve, and the Fed is ready. What a way to finish the week! Last week’s economic data was mixed but there was nothing reported that would cause the Fed to reverse course. On the bright side: retail sales were a bit better than expected, PPI rose at its […]

712, 2015

US Treasury Yield Curve, Dec. 6

By |December 7th, 2015|0 Comments

A 25 bps rate hike appears like a done deal for December 16th and the markets are already suggesting another 25 bps next March. The November jobs report was above expectations by 10,000 as nonfarm payrolls grew 211,000. (The participation rate was up slightly from 62.4% to 62.5%.) The previous 2 months were revised upward […]

1708, 2015

US Treasury Yield Curve, 8-16-2015

By |August 17th, 2015|0 Comments

The big news last week came out of China. The People’s Bank of China (POBC) devalued the Yuan by 3.5% in an effort to stabilize its stock market but it also had unintended international effects. More importantly, it gives pause to other central banks on the cusp of devaluing their own currencies. It does not appear that any real […]

1008, 2015

US Treasury Yield Curve, 8-9-2015

By |August 10th, 2015|0 Comments

Bond yields are pretty much unchanged since the first of the year but the ride has been anything but smooth. The forecasters have been trying to predict when the Fed might begin to normalize monetary policy with its first rate hike in 9 years. Neither Fed officials, economists, or market experts have been tuned in to the realities that […]

708, 2015

US Treasury Yield Curve, 8-2-2015

By |August 7th, 2015|0 Comments

The UST market rallied last week as investors perceived the likelihood of a Fed rate hike shifting from September to December. The 2 year UST was down 7 basis points to .67% and the 10 year UST fell from 2.32% to 2.20%. Comments from the FOMC meeting produced no evidence in regard to future policy but the market’s were […]

2707, 2015

US Treasury Yield Curve, July 26, 2015

By |July 27th, 2015|0 Comments

Does “a nose dive” in industrial commodity prices matter? In regard to future monetary policy and the prospects for inflation, it matters a lot. In fact, there has never been an instance in the past where the Fed has raised interest rates when commodity prices were depressed. It is interesting to note that the Bloomberg Commodity Index, dominated by […]

2007, 2015

US Treasury Yield Curve, July 20, 2015

By |July 20th, 2015|0 Comments

The yield curve experienced a soft flattening last week as prices on the longer duration bonds were slightly improved. The question remains unchanged: Will the Fed raise rates during the fourth quarter, regardless of market disagreement? Chair Yellen in her Congressional testimony said that “there was no prescribed date for raising rates and that the decision will be data […]

1307, 2015

US Treasury Yield, 7-12-2015

By |July 13th, 2015|0 Comments

“THINGS ARE GETTING BETTER,” Chair Yellen stated in a prepared speech delivered in Cleveland last week. She reiterated that interest hikes are still on track for later this year amid signs of wage gains and the potential for inflation. She said that “based on my outlook, I expect it will be appropriate to raise the funds rate and begin […]

2906, 2015

US Treasury Yield, June 29, 2015

By |June 29th, 2015|0 Comments

The yield curve steepened last week as longer duration bonds reacted to uncertainties in the Eurozone. Greece and its creditors are still far-apart in their negotiations with time running out. While the long-end of the curve collapsed, the shorter-end was unchanged. The 2 year UST at .72% and the 3 year at 1.09% continue to […]