BTC iShares U.S. Treasury Bond ETF

In this series, we’ll analyze Fed members’ comments in June 2017 to better understand their outlooks on the US economy and how they justify their hawkish or dovish stances.

Saudi Arabia has also been involved in the sale of US Treasuries. The country is the 15th-largest holder of US Treasury bonds in the world.

The negative interest policy of the central banks is casting government bonds as a futile choice for investors compared to stocks and gold. As a result, bond prices dipped and yields started rising.

If you’re a bond (BSV) (AGG) investor or fund manager, fluctuation in interest rates is one of the key risk drivers for the returns you get from your portfolio.

This constituent of the LEI is an economic model, constructed by modeling changes in six financial market instruments.

The failure of US Congress to raise the debt ceiling would result in a partial government shutdown. The US Treasury wouldn’t be able to issue any government debt, and it could end up borrowing from its retirement savings fund.

Most countries tend to issue debt to fund their deficits and keep paying interest on these borrowings. These revenues are generated through taxes from companies and individuals.

The current debt ceiling is likely to be breached on January 19, and once that happens, the US Treasury must stop issuing any new debt (SHY).

If the Chinese government decides to sell its US debt (GOVT) holdings, it could lead to another possible global financial crisis.

On January 10, 2018, Bloomberg News broke a story that the Chinese government could be planning to slow down its purchases of US government debt (GOVT).

Understanding the Leading Credit Index The Conference Board LCI (Leading Credit Index), a constituent in the LEI (Leading Economic Index), is published every month and tracks credit conditions in the US economy by following changes in six financial market instruments: the two-year swap (SHY) spread (real time) the three-month LIBOR[1.Intercontinental Exchange London Interbank Offered Rate] (SCHO) […]

In its December monetary policy statement, the Fed projected three interest rate hikes in 2018 and three in 2019, depending on the incoming economic data.

St. Louis Fed president and CEO James Bullard gave a presentation at a regional economic briefing on December 1. Throughout this series, we’ll analyze Bullard’s take on the risks of an inverted yield curve.

The Leading Credit Index for October was reported to be -0.70, improving from the revised September reading of -0.64.

The US FOMC left rates unchanged after the November 2017 meeting, as expected, setting the stage for a potential rate hike in December.

The Leading Credit Index is an economic model that’s modeled on the performance of six major financial market instruments.

As per the September ADP National Employment Report, the US private sector added 135,000 jobs during the month. The figure is a sharp decrease from 228,000 in August.

In the long run, Williams said it would be difficult to predict how markets would react to the Fed’s balance sheet unwinding program.

Understanding the Leading Credit Index The Conference Board LCI (Leading Credit Index), a constituent of the LEI (Leading Economic Index), is constructed based on the performance of six financial market instruments. These components track lending conditions in the US economy. Performance of the LCI Improving credit conditions are considered positive for the economy. When the LCI […]

The US dollar rallied after the latest FOMC (Federal Open Market Committee) meeting statement was released on September 20.

This week volatility (VXX) has continued to stick to its trend of sudden spikes and then dropping immediately.

The key reason for the debt ceiling deal was to approve aid to Hurricane Harvey victims. A US government shutdown could have adversely impacted relief operations.

In the financial markets, there are a few financial assets whose demand increases dramatically in times of uncertainty.

Understanding the Leading Credit Index The Conference Board Leading Credit Index (or LCI), which tracks lending conditions in the economy, is reported monthly. The index has six constituents: 2-Year Swap Spread (SHY) (real time) LIBOR[1.London Interbank Offered Rate] 3-month (SCHO) less 3-month Treasury-bill (VGSH) yield spread (real time) debit balances in margin accounts at broker dealers […]

A failure to raise the debt ceiling will likely result in a US government shutdown and a default by the US, which would be catastrophic for the global economy and financial markets (VTI) (USMV).

Equity markets in the US and across the globe reported heavy losses as risk aversion set in.

Bonds, especially U.S. Treasuries (GOVT), are considered one of the safest assets in which to park your funds in times of uncertainty.

The safe havens that benefit the most in times of uncertainty include gold (GLD) and U.S. Treasuries (GOVT).

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.

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.

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.

In its June policy meeting, the Fed has signaled that it will stop replacing maturing securities and slowly reduce the size of its balance sheet.

The FOMC June meeting minutes that were released on July 5, 2017, indicated that the FOMC members were divided over when to begin shrinking the Fed’s bloated balance sheet.

Dallas’s Federal Reserve president, Robert S. Kaplan, said that the rebound in the US economy is likely to continue for the rest of 2017.

New York’s Federal Reserve president, William C. Dudley, recently spoke at a business forum in New York and said that he was pleased with the current state of the US economy.

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.

US Treasuries (GOVT) had a mixed response to the FOMC statement and the Fed’s interest rate hike.

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.

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.

Bond yields of U.S. Treasuries managed to recover from the losses of the previous week. Demand for US bonds receded.

Demand for fixed income securities will likely be subdued because of excess supply this week, which would mean additional support for bond yields.

The Federal Reserve’s second last meeting of 2016 is now over, leaving only one meeting left in which the central bank can enact a rate hike.

The issue of the Fed’s credibility is not a new one. The effectiveness of the prolonged monetary accommodation has sparked a lot of debate in the past.

The yield on US ten-year Treasury securities fell below the 1.6% mark for the first time on September 26, 2016 due to a rise in demand.

The UK has taken over other countries as the most sought-after bond market destination, especially after the Brexit vote.

In the “Janus Market GPS,” the team had outlined its belief that a low unemployment rate signaled tighter labor market conditions.

Between Jan 2014 and September 2015, the break-even rate was higher than the CPI inflation rate, as markets were surprised by the sudden dip in oil (USO) prices.

While credit spreads do give you a good picture of the credit risk of one bond compared to another, it’s not the only factor they represent.