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    Fund Managers

    An Update on Fairholme’s Positions in Fannie Mae and Freddie Mac

    Berkowitz believes that Fannie Mae and Freddie Mac entities are highly valuable and expects them to generate earnings of at least~$21 billion a year.

    By Santiago Solari
  • Financials

    Why Kocherlakota concludes that the FOMC is underperforming

    Even among those who have jobs, the fraction of people working part-time but who would like to work more hours is higher than the historical average.

    By Mike Sonnenberg
  • Financials

    Why Treasury and mortgage rate spreads hit historic highs

    The interest rate spread between 10-year Treasury securities (IEF) and 30-year conventional mortgages (VMBS) was at historic highs at the end of 2008 and the beginning of 2009

    By Phalguni Soni
  • Financials

    Must-know: How the Fed may deal with its bloated balance sheet

    The Fed’s balance sheet size has bloated to $4.3 trillion as on May 14, 2014, compared to pre-crisis level of $870 billion seen on August 1, 2007.

    By Mike Sonnenberg
  • Energy & Utilities

    April FOMC: Are you ready for clues of the Fed’s new guidance?

    This week, the Fed’s third Federal Open Market Committee (or FOMC) meeting of the year will be held on April 29–30—always a market-moving event.

    By Phalguni Soni
  • Financials

    Why low interest rates have sparked record debt issuance

    Improvement in the up/down ratio commenced one quarter prior to the formal demarcation of the end of the recession.

    By Phalguni Soni
  • Financials

    Do mortgage rates follow movements in Treasury yields?

    This series will analyze how mortgage interest rates have behaved with respect to Treasuries and the reasons for this correlation.

    By Phalguni Soni
  • Financials

    Interest rate spreads for Treasuries and mortgage rates: A guide

    The interest rate spread is the difference between Treasury yields (TLH) and interest rates on mortgages (VMBS). Interest rate spreads tend to widen in times of economic uncertainty.

    By Phalguni Soni
  • Financials

    Why was indirect bidder demand for 30-year bonds higher?

    The 30-year bond is the longest maturity Treasury security.

    By Phalguni Soni
  • Financials

    Kansas City Fed President—macroeconomics and monetary policy

    While the massive bond buying program was an aggressive step taken by the Fed to stimulate the economy, the normalization and tightening process could be much more complicated.

    By Mike Sonnenberg
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    Company & Industry Overviews

    Is Student Debt the Next Bubble to Hit the US Economy?

    Many are likening the current student debt situation in the United States to the mortgage debt situation that led to the 2009 financial meltdown in the US economy.

    By Surbhi Jain
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    Company & Industry Overviews

    Why Student Debt May Not Affect the US Economy Like Sub-Prime

    According to the White House Council of Economic Advisers, “Student debt is less likely to make a recession more severe or slow an expansion in the way that mortgage debt may have.”

    By Surbhi Jain
  • Financials

    Must-know: Why invest your money in fixed income ETFs?

    Fixed income as an asset class encompasses a variety of securities, including bills, notes, and bonds, syndicated loans, and structured products.

    By Mike Sonnenberg
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    Financials

    Jeffrey Gundlach: Where’s the Bond Market Heading?

    Gundlach observes that the two-year Treasury yield has bottomed out, while the five-year Treasury is also almost double its mid-2012 lows.

    By Surbhi Jain
  • Financials

    How to measure your portfolio’s interest rate risk with convexity

    Portfolio durations differ from key rate durations, as even though the durations of two portfolios may match, both portfolios may differ in the maturity profiles of the bonds they comprise, which will result in differing key rate durations.

    By Phalguni Soni
  • Financials

    Richard Fisher explains why excess reserves can create velocity

    Richard Fisher also discussed the impact of quantitative easing (or QE) on excess reserve balances held by depository institutions at his speech at the London School of Economics on Monday, March 24.

    By Phalguni Soni
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    Macroeconomic Analysis

    Will the Rollback of Dodd-Frank Help the Real Estate Sector?

    In a continued effort to deregulate the economy, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act.

    By Ricky Cove
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    Macroeconomic Analysis

    How Existing Home Sales Trended in February

    The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

    By Ricky Cove
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    Macroeconomic Analysis

    Double Whammy: Rate Hikes and Balance Sheet Trimming

    The US Federal Reserve has accumulated huge quantities of fixed-income (BND) securities as part of its three quantitative easing programs, QEs 1, 2, and 3.

    By Ricky Cove
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    Macroeconomic Analysis

    How the FOMC Views the US Financial Situation

    The FOMC staff review indicated that the US investor sentiment has improved in the inter-meeting period.

    By Ricky Cove
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    Macroeconomic Analysis

    Changes to the Balance Sheet Unwinding Program

    According to the latest communication from the Fed, the pace of the balance sheet unwinding program has been increased to $20 billion per month.

    By Ricky Cove
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    Macroeconomic Analysis

    A Double Dose of Tightening from the Fed in 2017

    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.

    By Ricky Cove
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    Macroeconomic Analysis

    The FOMC’s View of the Equity and Bond Markets

    The FOMC’s November meeting minutes deemed the bond market’s yield curve to be flattening between meetings. The report indicated that bond yields have risen since the September FOMC meeting for multiple reasons.

    By Ricky Cove
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    Consumer

    Households Think It’s a Good Time to Buy a Home

    According to the latest report from NAR, existing home sales have risen 2% to a seasonally adjusted annual rate of 5.48 million in October.

    By Ricky Cove
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    Macroeconomic Analysis

    Key FOMC Insights and the New Fed Chair

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

    By Ricky Cove
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    Macroeconomic Analysis

    Why the Fed Has Initiated Balance Sheet Normalization

    Atlanta Federal Reserve president and CEO, Raphael Bostic, recently spoke at a conference about the Fed’s balance sheet normalization program.

    By Ricky Cove
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    Macroeconomic Analysis

    Why FOMC Members Aren’t Worried about the Market Reaction to Balance Sheet Trimming

    The September meeting minutes indicated that the members underscored that the reduction in the Fed’s balance sheet would be gradual.

    By Ricky Cove
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    Macroeconomic Analysis

    Why FOMC’s John Williams Sees No Impact of Balance Sheet Unwinding on Markets

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

    By Ricky Cove
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    Macroeconomic Analysis

    Why Is FOMC Starting to Unwind Its Balance Sheet without a Target?

    In the September 20 meeting, FOMC (US Federal Open Market Committee) finally announced the start date of its balance sheet unwinding program.

    By Ricky Cove
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    Macroeconomic Analysis

    Markets Are Confident on Fed Balance Sheet Trimming Announcement

    In its efforts to revive the US economy from the Great Recession, the US Fed started purchasing US government-backed securities in 2008.

    By Ricky Cove
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    Macroeconomic Analysis

    Could the Fed Announce Balance Sheet Shrinking in September?

    The Fed, in its efforts to normalize policy, announced that it is starting the balance sheet unwinding program soon.

    By Ricky Cove
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    Macroeconomic Analysis

    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.

    By Ricky Cove
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    Macroeconomic Analysis

    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.

    By Ricky Cove
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    Macroeconomic Analysis

    Will Market Shocks Really Be Minimal to Balance Sheet Unwinding?

    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.

    By Ricky Cove
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    Macroeconomic Analysis

    Why FOMC Members Were Divided about Balance Sheet Shrinking

    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.

    By Ricky Cove
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    Macroeconomic Analysis

    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.

    By Ricky Cove
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    Macroeconomic Analysis

    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.

    By Ricky Cove
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    Fund Managers

    Why Schlifske Prefers Mortgage REITs and High Yield Debt Instruments

    John Schlifske believes the low growth environment will continue in the short term. In this environment, he thinks that the equity market may not yield high returns.

    By Sarah Sands
  • Consumer

    Is residential construction enough to fuel construction spending?

    The U.S. Census Bureau of the Department of Commerce estimated construction spending in January 2014 at a seasonally adjusted annual rate of $943.1 billion.

    By Phalguni Soni
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    Industrials

    The Philadelphia Fed survey: Firms plan to invest in manufacturing

    The General Activity Index increased by 15.3, indicating an increase in the manufacturing activity after the unusually cold winter.

    By Phalguni Soni
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