Second Fed voice sounds cautious note on global growth, pace of interest rate increases
The Fed is sounding less aggressive about raising interest rates in 2019. Today, Friday, November 16, Federal Reserve Vice Chairman Richard Clarida said that the Federal Reserve has to factor the possibility that the global economy is slowing into its decision on how...
Another sign of coming inflation to worry the Federal Reserve
The 3.1% year over year growth in average hourly wages reported for October is, by itself, enough to convince the Federal Reserve that an increase in inflation, long awaited with concern, is visible on the horizon. Today’s jump in the Producer Price Index (PPI)...
U.S. Treasury borrowing to double in 2018 to $1.34 trillion
Amazing what important financial news can get pushed off the front page these days. On Monday the drop of even more U.S. indexes into correction territory and reports that the White House was teeing up new tariffs on another $250 billion in Chinese goods pushed truly...
Fed’s “footnotes” in yesterday’s minutes from the September meeting worry markets
Reading the fine print is good advice when it comes to minutes from meetings of the Federal Reserve’s Open Market Committee too. So far today, October 18, the financial markets are in a slight retreat because of notes released yesterday along with the minutes of...
What’s the opposite of a “Goldilocks” market?
A Big Bad Wolf market? A Sauron market? An Evil Stepmother market? The reaction to this morning’s inflation report suggests me might need a name for this kind of market. The worry, my worry, going into today’s Consumer Price Index (CPI) inflation report...
Tomorrow’s inflation numbers are important after today’s rout
At 3:30 p.m. New York time the Dow Jones Industrial Average was down a big 2.39% or 632 points. The Standard & Poor’s 500 was lower by 2.55%. The NASDAQ Composite Index fell 3.16%. (The S&P 500 closed down 3.29%. The Dow was lower by 832 points or...
Bond market takes a bite out of stocks today
The yield on the 10-year Treasury rose another basis point today, after climbing yesterday, to 3.19%. The yield on the 2-year Treasury climbed to 2.88%, up 4 basis points. A lower than expected report on initial claims for unemployment helped fuel the climb in yields....
Mortgage rates and odds of December interest rate increase climb after Fed meeting
Yesterday meeting of the Federal Reserve’s Open Market Committee ended with the committee raising the short-term Fed Funds benchmark rate 25 basis points and signaling an intention of raising rates again in December and then three more times in 2019. Yesterday...
Fed raises interest rates, locks in December increase, signals 3 moves in 2019
No surprise on a September interest rate increase from the Federal Reserve today–but some very aggressive signals on policy into 2019. The 25 basis point increase today raised the Fed Funds rate to a target of 2% to 2.25%. The economy remains solid; Â job growth...
Battle over bond yields, interest rates shifts to 2019
Remember back at the beginning of 2018 when bond investors and traders couldn’t agree on whether the Federal Reserve would raise interest rates two times, or three times or four times in the year? (It wound up being four.) Well, we’re looking at a replay...
Is 10-year yield above 3% finally here to stay? U.S. Treasury raises targets for debt sales in second half of 2018
Yesterday the Treasury Department said that it will raise long-term debt issuance to $78 billion this quarter. That would be an increase from the $73 billion in sales last quarter and the third consecutive quarterly increase. The increased sales of Treasury debt are...
Fed statement today cements September interest rate increase
Today Federal Reserve left its benchmark interest rate at 1.75% to 2.00% and described the U.S. economy in terms that make an interest rate increase at the central bank’s September 26 meeting a virtual certainty (absent some startling news event). The CME...
As expected, the Fed raises interest rates; as suspected, the Fed signals 4 increases in 2018 instead of 3
No surprise here: The Federal Reserve raised its benchmark short term interest rate by 25 basis points to 2% today from 1.75%. It was the second interest rate increase of 2018. But the Fed also signaled that it was more likely to raise rates two more times in 2018 for...
Here we go again on the euro: The bad news is that Italy’s financial crisis is political
The Dow Jones Industrial Average was down as much at 505 points today–before rallying to a loss of “just” 391 points or 1.6%–on fears that a crisis in Italy could once again put the entire EuroZone project in danger. Italian stocks were down...
10-year Treasury yields hit 3.1%; is the bond rout accelerating?
Not so long ago global cash seeking safety and liquidity was keeping the yield on the 10-year Treasury at 2.95% in spite of the huge budget deficit resulting from the December Tax Cuts & Jobs Act and the flood of bond sales by the U.S. Treasury and the prospect...
Fed leaves interest rates unchanged, seems to signal continued gradual interest rate increases for rest of 2018
As expected by the financial markets, the Federal Reserve left interest rates unchanged at today’s meeting of the Open Market Committee. As expected the Fed didn’t really clarify its stance on inflation and interest rate increases, acknowledging that...
U.S. Treasury sets borrowing record in first quarter–Treasury Secretary Steve Mnuchin–What me worry?
In the period from January through March, the U.S. Treasury borrowed $488 billion. That’s a record for the quarter and $47 billion more than the Treasury had earlier estimated. The Treasury finished March with a cash balance of $290 billion, up from an initial...
Are foreign buyers pulling back from Treasuries? Recent auctions say so
It’s a recent development, but it looks like more foreign buyers are sitting out recent Treasury auctions. At Tuesday’s $30 billion auction of three-year notes, foreign buyers accounted for the smallest share of the offering since September. At...
Back to normal today? And a reminder of what normal is
With all available officials on deck today in Beijing and Washington to talk down fears of a trade war and to talk up prospects for trade talks, the U.S. financial markets have returned to “normal.” And what is “normal” right now? A 0.47% gain...
Cracking the nutty asset correlations of this market
This morning provided a great example of how confusing and complicated correlations among asset classes are in the current market. Stocks rallied with the Standard & Poor’s 500 up 1.15% as of 11 a.m. New York time and the Dow Industrial Average ahead 1.7%....
Fed raises interest rates and marks steeper path on future increases
Well, it wasn’t unexpected so stocks didn’t plunge. But it is still close to what the financial markets feared. Today, the Federal Reserve raised its benchmark short term interest rate another 25 basis points to a range of 1.5% to 1.75%.  And forecast a...
10-year Treasury yields may be stuck in a range but the LIBOR interest rate benchmark keeps climbing steadily higher
Ahead of tomorrow’s interest rate announcement from the Federal Reserve, 10-year Treasury yields remain stuck just below 2.90%. The bond market just can’t seem to admit that the Fed might raise interest rates three times in 2018–let alone a potential...
CPI inflation comes in on the mark–no surprises ahead of March 21 Fed meeting
After a worrying 0.5% jump in January, headline inflation as measured by the Consumer Price Index increased by just 0.2% in February. That was right on the 0.2% mark expected by economists surveyed by Briefing.com. Core inflation, which excludes more volatile food and...
Treasury market survives this week’s first test
The U.S. Treasury sold $28 billion of three-year Treasury notes and $21 billion of 10-year notes today–and the price of the 10-year note actually climbed, taking the yield down to 2.87%, three basis points lower than Friday’s 2.90% yield. This was a good...
Treasury auction today could have been worse; yields climb anyway
The U.S. Treasury auctioned off $35 billion in 5-year notes today. The yield climbed to 2.658%. In trading the 5-year Treasury closed at 2.68% today. That yield is up 23 basis points in the last month. The yield on the 10-year Treasury note closed at 2.94%, up 5 basis...
10-year Treasury climbs to 2.91% on less than enthusiastic bills auction
Not a good way to begin if you have to sell $441 billion in net debt in the first quarter of 2018. This morning the U.S. Treasury sold $96 billion of short-term bills at yields unseen since 2008. At auction the government sold $51 billion of three-month bills at a...
Get ready for the deluge in the Treasury market this week
With the U.S. financial markets closed for Presidents’ Day and with markets in China and Hong Kong still closed for the Lunar New Year, it’s a slow news day for stocks and bonds today. But get ready for the action to resume on Tuesday with much of the...
V bottom or double top before deeper correction
As of yesterday the Standard & Poor’s 500 stock index had climbed 5.8% in the last five trading sessions. That recouped much of the 9.03% drop (not quite an official correction of 10% or more) from January 26 through Februry 8. Which, of course, raises the...
Higher long-term volatility lurks in widening spread of interest rate forecasts
Today Goldman Sachs projected that the yield on the Treasury 10-year note will climb as high as 3.5% in the next six months. In addition, the Wall Street giant told Bloomberg, the U.S. Federal Reserve will raise rates four times in 2018. The yield on the 10-year...Jim’s Daily Email Alerts:
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