Published September 13, 2024
After waiting all year for the Federal Reserve to begin lowering interest rates, the day has finally come when they will do so. Below is Schwab’s take on the Fed’s rationale behind changing their rate policy and how that path might affect the bond market. (more…)
Published August 23, 2024
The market is eagerly awaiting the commencement of Federal Reserve interest rate cuts next month. The sharp, nonstop rebound from the August selloff provides ample evidence of investor enthusiasm for the upcoming cuts. Market interest rates have fallen back to where they were 18 months ago. The chart below shows how the yield curve has changed over the past year. The left side of the curve displays very short-term rates (1 month to 1 year) which are driven by the Fed. They have been anchored to the Fed’s 5.25% short-term target rate while the longer-term rates have fallen notably.
Published August 12, 2022
The article below from Zacks provides a good overview of the key economic indicators to look for as we move into the second half of the year.
“The Federal Reserve is actively trying to curb demand in the economy by raising rates, and all the talk is about whether they can usher a ‘soft-landing’ without triggering a deep recession. So, the Fed will be a key factor to watch in the second half of the year. But I also have three other economic fundamentals investors should put on their watchlists, as they could be key in determining the path of the economy and markets over the next year. (more…)
Published April 15, 2022
This week, with all the talk about inverted yield curves and interest rates, we shift our attention from stocks to the newfound misery experienced in the bond market. Money is leaving bonds and rolling into any stock with a tasty yield – e.g. dividend and utility stocks, real estate. (more…)
Published August 16, 2019
Like a surfer bounced by wave upon wave, investors were hit this week by a second wave. After a one day burst of market joy as the Trump Administration dialed back the September 1st imposition of trade tariffs, the U.S. Treasury bond market was rocked by a deeper reduction in yields. (more…)
Published December 7, 2018
Stock investors were reminded this week that the market remains unhealthy. After approaching a retest of this market correction’s lows a couple of weeks ago, stocks ripped higher last week to recover all of the ground given up the week before. This week began well. (more…)
Published March 2, 2018
This week we share some good information from a webcast given by Charlie Bilello of Pension Partners. The first chart shows the downward trend of the 10-year U.S. Treasury yield. Note the green arrows as the yield hits the upper portion of the channel. We are sitting right at the top of the channel. Do we want to see yields break through to the upside? (more…)