Weekly Update

November 3, 2023 Okay, maybe we are early (Maybe we are wrong and rates will never be this low again!) but this has been a powerful rally in the long end of the curve. Since October, the 10-year yield had risen 41 basis points to a high of 4.99% and then,

October 20, 2023 Since the July 26th meeting (The last time the Fed raised the Overnight rate to 5.25-5.50%), the yield on the US Treasury 30-year Bond has risen 1.13%. Other longer dated bonds have followed suit and their yields have climbed. As the yields have climbed, their prices have fallen, creating

October 6, 2023 History doesn’t always repeat, sometimes it doesn’t even rhyme. Take 2023 for instance, just about everyone in the market has been calling for a recession. Since 2021 when the Fed started raising interest rates the theme was not “If” but “When” the recession would start and how bad

September 15, 2023 Okay so the 1974 PR effort by President Ford was considered to be one of the biggest government public relations blunders ever, but perhaps it has application now? As the FOMC gathers next week to decide whether to raise, pause or hold; we say: Whip Inflation Now!   This

August 18, 2023 It’s Jackson Hole week, the annual Fed symposium that ends with a speech from Fed Chair Powell. Since the last FOMC meeting, July 26th, the 10-year yield has risen 39 basis points and the 2-year yield has risen 8 basis points, causing the yield curve to bear steepen. Add

August 4, 2023 The consensus is in, we are heading for a soft landing. But someone forgot to tell the bond market. If we are heading for a soft landing, aka All Set no recession, how does the currently inverted curve, un-invert? Typically, long US Treasury rates are higher than short

July 28, 2023 A dovish Fed meeting, a solid GDP report and an encouraging PCE report all supported the soft-landing scenario. However, fixed income markets responded negatively as investors realized just how long rates may stay high and what that might mean for the curve. Wednesday the FOMC raised the

July 14, 2023 The recent CPI and PPI reports increased the potential for a soft landing for the US Economy. This is good news, job losses, company defaults and market turmoil should be avoided, if it’s possible. But the FOMC remains steadfast in their determination to fight the inflation they see in

June 30, 2023 Markets moved aggressively this week. Positive revisions to first quarter GDP cleared the deck for the additional FOMC overnight rate increases that Fed speakers were signaling in their speeches. But is the economy really growing that fast, today? Friday’s release of the PCE report and earnings guidance from key industries

June 22, 2023 The FOMC held their meeting last week. From that we have a press release, press conference various speeches and congressional testimony. The overriding theme has been: Higher rates for longer (Note, we are back to Higher). But didn’t the FOMC just pause? If they are so worried to get inflation down