This will be a rather short blog following up on last week’s focus on key levels for the 2 and 10-year Treasury yields.
I’m a bit tired as last night (Thursday), I had a flight connection through D/FW Airport to return home to Orange County.
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Blog Archives
Taking a Peek at a Possible 2-Year Peak?
Last week’s ADP payroll report really rocked the bond and stock markets. It was further support for the Fed to remain tighter for longer. This chart shows how strong private employment growth was.
On the other hand,
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Turning up the Heat and Icarizing the Economy
Last week was my birthday, and I chose to celebrate it by heading to my home in the desert to check out some work that had been done and to play tennis. This picture from my car dashboard shows a couple of pieces of interesting information.
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It Costs A Lot To Win and Even More To Lose
Last week I discussed how recessions have not occurred until an inverted yield curve reverts to being positively sloped such that long rates are higher than short rates. I wanted to do a bit of a deeper dive to see what it means for employment peaks.
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Fire on the Mountain: Dead Ahead for Jay Powell
Fed Chairman Jay Powell understandably garnered a lot of attention after the Fed meetings concluded last week, which resulted in the first pause in rate hikes after 10 consecutive increases. At the same time, to manage expectations, the Fed dot plot forecasts two more interest rate hikes before they’re done for this cycle.
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The Squeeze Is On
As this chart shows, the yield continues to invert with 3-month Treasury Bill yields substantially higher than 10-year Treasury Note yields.
As I wrote about previously, Fed Chairman Jay Powell discounted traditional yield curve indicators such as the differential between 10s and 3-month T Bills and 10s and 2-year Treasury yields.
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Banking on Cuts
In the short run, the Fed chose to keep up the inflation fight despite deteriorating financial stability emanating from a wounded banking sector. There is now a lot of market data corroborating that the Fed will have no choice but to start cutting rates soon.
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Who's Afraid of Treasuries? When Stability Breeds Instability
I’m going to breeze through a number of tweets and charts as I’m headed to watch the semi-finals and finals of the tennis matches at Indian Wells. The weather is going to be outstanding, and the matches have a similar promise.
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Hiding in Plain Sight
Like many others, I have been looking for where cracks in the financial system might appear catalyzed by the aggressive Federal Reserve rate hiking policy and balance sheet contraction. And while the housing market has been an obvious sacrificial lamb via much higher mortgage rates,
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Bond Market Skepticism & Emerging Market Carnage
I couldn’t stay away from interest rates for too long. Last week was very fascinating. There was a lot of news that should have been quite bearish for long-term bonds but instead, yields moved down by about 5 basis points for the week for the 10-year Treasury note.
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