BTC iShares Floating Rate Bond ETF
Must know: Stress tests and the likely timing for rate increases
On March 26, the U.S. Fed released bank stress test results indicating which banks can increase dividend payouts and share buybacks.
Is simpler and more transparent regulation better for investors?
Over the course of his speech, Plosser provided several reasons why simplicity and transparency can enable markets to price risks in a more informed manner.
The Fed starts monetary tightening: What’s next for junk bonds?
Key implications of the Fed’s QE3 exit for junk bonds and leveraged loans The Fed’s policy statement at the end of its October Federal Open Market Committee (or FOMC) last week stressed the improving economy. In a first, it also mentioned that measures of labor market slack had reduced. The risk of inflation falling persistently […]
Will consumer spending affect the yield curve and Fed funds rate?
The Bureau of Economic Analysis will release its personal income and outlays report for March on Thursday, May 1. The report measures individuals’ income and expenditure levels.
Why does Richard Fisher advocate for Delphic forward guidance?
In this article, we’ll discuss Fisher’s take on Delphic forward guidance. According to Fisher, Delphic forward guidance is more obscure and enigmatic.
Why the Bid-to-Cover Ratio Rose for 2-Year Floating Rate Notes Auction
The US Treasury introduced two-year floating rate notes (or FRNs) in January 2014.
T-Notes Auction: Poor Demand amid the FOMC Meeting
The overall demand fell for the seven-year T-notes auction because the FOMC meeting didn’t give any clarity regarding an interest rate hike in the future.
Why investors are turning to corporate bond ETFs
Investors seeking exposure to investment grade or high yield corporate debt have increasingly been using fixed income ETFs.
Brexit Vote: How Did US Treasury Auctions React?
The US Treasury auctioned 30-year TIPS (VIPSX)(LTPZ) worth $5 billion on June 22.
A guide to purchasing managers’ indexes for ETF investors
As we’ve seen in this series, there are three major Purchasing Managers Index (or PMI) reports issued in the U.S.
The Fed uses 2 newer tools in the unprecedented stimulus territory
The part discusses Yellen’s take on the monetary policy challenges, the role of qualitative and quantitative forward guidance since the Great Recession, and the recovery.
Interest rate risk: Measure and avoid the pitfalls of duration
Primary portfolio risks that must be matched include interest rate risk, yield curve twists, spread risk, credit risk, and optionality.
Why the 2-year FRN auction was popular with investors
The U.S. Treasury introduced two-year floating rate notes (or FRNs) in January. A FRN is a debt security. It’s interest payment varies. The interest rate usually references an interest rate benchmark.
Why did demand for floating-rate notes decline?
Floating-rate notes (FLRN) are the Treasury’s most recent issue. Their first auction was held in January 2014. They offer you a term-to-maturity of two years.
Why do investors continue to prefer floating-rate notes?
Last week’s Treasury auctions included $13 billion two-year Treasury FRNs auctioned on May 28. The FRNs were indexed to the May 19 13-week Treasury bill auction high rate,.
Janet Yellen on why the Fed changed its forward guidance policies
In this part, we will discuss why the Fed has made changes to its forward guidance policies, which give investors information of the future path of the Fed funds rate.
Bond investing: Key risks and strategies to boost your portfolio
As with all investments, fixed income investments are subject to risks too. Bond prices increase when interest rates decline and decline when interest rates increase.
How firms’ inflation expectations impact the Fed’s mandate
Other factors remaining constant, the higher the expected rate of inflation, the higher the required rates of return on both debt (AGG) and equity (VOO) investments, and vice versa.
Investors’ Fixed Income Barbell Choices
You have laid out a good case to consider both emerging markets local currency bonds as well as floating rate investment grade debt.
How You Can Hedge Interest Rate Risk as Rates Rise
Investors can hedge interest rate risk by holding floating rate bonds. As interest rates rise, consider investing in long-dated Treasuries.
Positioning your barbell fixed income portfolio
Portfolio positioning will depend on your interest rate outlook. So it’s important to keep track of where rates are headed. As we mentioned earlier, this is an active strategy that requires periodic monitoring and reinvestment.