The Fed Could Announce Balance Sheet Reduction Plan in September
In its June meeting, FOMC (Federal Open Market Committee) members detailed plans to shrink the $4.5 trillion balance sheet.
Securities
Market Realist has the latest news and analysis on debt securities, from bonds to exchange traded notes.
Why Inflation Remains a Huge Concern for FOMC Members
Members of the FOMC (Federal Open Market Committee) attributed the recent slowdown in inflation growth to idiosyncratic factors.
New York Fed President William Dudley Discussed Inflation
In his speech on August 10, New York Fed President William Dudley joined the group of FOMC members to ease concerns about slowing inflation (TIP).
Why the British Pound Has an Important Week Ahead
The British pound (FXB) had another negative week as a dovish statement from the Bank of England continued to drag the currency lower.
Will Bond Yields Continue to Fall amid Geopolitical Tensions?
Bonds, especially U.S. Treasuries (GOVT), are considered one of the safest assets in which to park your funds in times of uncertainty.
Should We Be Worried about Greenspan’s Bond Market Warning?
Greenspan cites rapid inflation growth as the reason for a bond market collapse. But the markets and Fed officials think otherwise.
Why Bond Prices Rose after the FOMC’s Statement
US government bonds gained after the FOMC (Federal Open Market Committee) indicated in its July 2017 statement that near-term inflation could remain below its 2% target.
Will the US Balance Sheet Unwind Affect the Markets?
After the July FOMC meeting statement was released, market participants came to believe that the Fed would begin the process of balance sheet normalization soon.
What the Conference Board LEI Tells Us about the Market
The Leading Credit Index is one of the constituents of The Conference Board Leading Economic Index (or LEI), which is reported by The Conference Board on a monthly basis.
The Bank of Japan Cuts Its Inflation Forecast
According to the statement it released at the end of its two-day meeting on July 20, 2017, the Bank of Japan has left its monetary policy unchanged.
Why the Fed Isn’t Satisfied with Labor Market Conditions
Despite the strong growth in employment numbers, the Fed’s latest monetary policy report had some comments about slow wage growth.
Why Fed’s Yellen Feels Gradual Rate Hikes Are Warranted
The tone of Yellen’s responses before the committee confirmed that the Fed is set to stay its course on monetary tightening, leading to policy normalization.
Is Negative Inflation Suggesting Contraction in Thailand in 2017?
Thailand’s (EEM) inflation in June 2017 exceeded the market estimate of a 0.1% drop.
Will Thailand Continue Its Economic Expansion in 2Q17?
Thailand saw impressive growth in 1Q17 due in part to external demand and public investment. Its GDP rose 3.3% in 1Q17 as compared to a 3% rise in 4Q16.
How Central Bankers Are Rattling Bonds and Currencies
Since the FOMC minutes and the hawkish turn of events at the European Central Bank and the Bank of England, bond yields across the board have been trending higher.
Confused Markets: Inside the ECB’s Struggle amid Miscommunication
The ECB (European Central Bank) in its recent monetary policy meeting on June 8 left its main refinancing rate at 0% and the interest rate at 0.25%.
Why Minneapolis’s Fed President Voted Against a Rate Hike
In an essay published by Minneapolis’s Federal Reserve president, Neel Kashkari, after he voted against a rate hike in the Federal Open Market Committee’s (or FOMC) June 2017 meeting, he explained why he dissented.
Why Philadelphia’s Fed President Supports Another Rate Hike
In a recent interview with The Financial Times, the hawkish president of the Philadelphia Federal Reserve said that the Fed’s balance sheet’s unwinding could begin in September 2017.
Why Chicago’s Evans Sees Moderate Risks to Financial Stability
Chicago’s Federal Reserve president, Charles L. Evans, recently spoke at a Money Marketeers of New York University event about monetary policy challenges in a new inflation environment.
St. Louis’s Bullard Thinks Rebalancing Will Take 5 Years
At the Illinois Bankers Association’s annual conference in Nashville, organized on June 23, 2017, St. Louis’s Federal Reserve president, James Bullard, sounded dovish about the US economy.
Why Cleveland’s Fed President Worries about Another Recession
Loretta J. Mester, the president and CEO of the Cleveland Federal Reserve, spoke at the 2017 Policy Summit on Housing, Human Capital, and Inequality held on June 23, 2017.
Why Bond Traders Continue to Be Confused
US Treasuries (GOVT) had another roller coaster ride this week due in part to the conflicting views from Fed members and weaker-than-expected economic data.
Is a Flattening Yield Curve a Sign of an Impending Recession?
Yields in the shorter timeframe such as the two-year yield (SHY) and T-notes (SCHO) are rising more than the ten-year or the 30-year (TLT) yields.
What Does Rise in US Interest Rates Mean for Bond Markets?
US Treasuries (GOVT) had a mixed response to the FOMC statement and the Fed’s interest rate hike.
What Narrowing Yield Spreads of US Treasuries Could Indicate
The US ten-year yield fell to 2.1% after the weak US data report, US inflation showed a decline of 0.1%, and retail sales fell by 0.3% for May 2017.
Fed Chair Yellen Warns about Its $4.5 Trillion Balance Sheet Unwinding
In her post-meeting press conference, Janet Yellen warned that the Fed could implement its balance sheet unwinding process soon if the economy continues to perform as expected.
US Dollar and US Treasuries Are Slightly Weaker
In the early hours on Wednesday, the US Dollar Index is slightly weaker. At 5:45 AM EST on June 14, the US Dollar Index was trading at 96.99—0.01% higher.
Do Tobacco Bonds Warrant a Place in Your Portfolio?
Tobacco bonds have been volatile in the last seven years. Falling MSA payments caused the volatility. Tobacco bonds offer relatively good cash flow returns.
Could an FOMC Rate Hike Drive Bond Yields Higher?
Bond yields of U.S. Treasuries managed to recover from the losses of the previous week. Demand for US bonds receded.
What’s Holding Back Foreign Investors from China?
Many leading bond index providers are still not including China’s onshore bonds in their benchmark indexes due to various regulatory and operational concerns.
Why Bond Yields Were Unaffected by Trump News
US Treasuries (SCHO) rallied all through the previous week supported by heavy safe-haven inflows into US bonds.
Will Fallen Angel Bonds Continue to Capture Solid Returns?
VanEck How fallen angels may complement high yield portfolios Income investors may want to consider fallen angels as a complement to their high yield bond allocations given their higher credit quality. Fallen angels’ higher average credit quality than original-issue high yield bonds may help absorb more of the potential broader market volatility that may occur […]
Why Are Bond Traders Increasing Their Net Positions?
US bond markets are trading on the expectation of an interest rate hike by the US Federal Reserve in June 2017. Last week, bond yields extended their slides.
How Fixed Income, Currency Markets Reacted to the French Election
European bonds (BWX) started showing signs of celebration late May 5 as opinion polls pointed toward an Emmanuel Macron win in the French presidential election.
Unpacking the Fed’s Outlook on the US Market
In its May statement, the Fed seems to have gone the extra mile to explain the slowdown in the first quarter.
Will the FOMC Remain Hawkish?
In its last meeting in March, the Fed increased interest rates (SCHZ) by 0.25% and sounded hawkish about the US economy.
How Did Fixed Income Markets React to the First Round?
Demand for fixed income securities will likely be subdued because of excess supply this week, which would mean additional support for bond yields.
Bill Gross and High-Yield Bonds: Priced for Too Much Growth
Investors generally invest in high-yield bonds (BND) when there are expectations for higher growth in the economy.
Your Update on the FOMC March Meeting Minutes
The minutes from the FOMC meeting on March 14 and 15 were reported on April 5 and revealed the tone of the conversation among members to be hawkish.
Inside the Fed’s Balance Sheet (The Biggest in the World)
The Fed has started the rate normalization process only recently and has a long way to go before the rates come back to pre-Lehman-collapse levels.
Green Bonds and Conventional Bonds: What’s the Difference?
There isn’t much difference between a conventional bond and a green bond (GRNB), also known as a climate bond. Both have similar risk-return profiles.
How Higher Interest Rates Can Impact Utilities
Treasury yields (TLT) become more attractive when interest rates rise, making utilities (XLU) less competitive in terms of yields.
Understanding How Higher Interest Rates Impede Utilities
The near-zero interest rate environment has resulted in a low cost of debt, which has motivated more new debt issuances by utilities.
Analyzing How the Yield Curve Impacts Small Caps
Another factor that impacts small-cap stocks’ performance is the yield curve. The yield curve has remained on the flatter side since the recession.
Is There an Opportunity in a Muni Sell-Off?
With their high yields, low prices, and tax-efficient returns, muni bonds (HYD) (ITM) could be available to investors at a dirt cheap rate in the coming months.
Tax Reform Is Full of Unknowns
President-elect Donald Trump’s tax reforms could bring cheers from taxpayers, but the tax bracket changes may not be well received by muni bond investors.
Attractive Relative Yields from Muni Bonds
We believe recent municipal bond weakness is an opportunity to put money to work at lower prices than what we have seen for some time. High quality, triple-A rated municipal bonds with maturities between 13 to 23 years currently offer higher nominal yields than 10-year U.S. Treasuries, making them particularly attractive, as shown in the […]
Richard Bernstein: Be Safe on Your Quest for Safety
After expressing his thoughts on the Baby Boomer generation’s having become risk-averse, Richard Bernstein moved on to the topic of the safety of “safe” investments.
A Pass on a November Hike: It’s Up to December Now
The expected occurred on November 2, 2016, when the FOMC (Federal Open Market Committee) left the federal funds rate unchanged at 0.25%–0.5%.
No Tapering, No Extension: ECB Avoids Future Talk on QE
ECB chief Mario Draghi had nothing to say about either tapering or extension of the bond buying program.
