Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, July 25, 2014
Yellen Goes Where No Man Has Gone Before / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank's history.
Friday, July 25, 2014
The Bond Markets, Black Swans, and the Tiny Spirit of Santo / Interest-Rates / Credit Crisis 2014
By: Dr_Jeff_Lewis
When The Bank Espirito Santo catches a cold, watch the world sneeze. If this evolving situation doesn't highlight the tight interconnectedness of the paper financial system, nothing else will.This a direct hit and a potential trigger that could set of a daisy chain of events, ultimately calling into question the only market left large enough to back (unofficially) fiat or debt based currencies.
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Wednesday, July 23, 2014
How to Start Reforming the Federal Reserve Right Now / Interest-Rates / US Federal Reserve Bank
By: MISES
Brendan Brown writes: First the good news. The House Financial Services Committee has held a hearing on “Legislation to Reform the Federal Reserve on its 100-year Anniversary.” The hearing focused on a bill introduced by Scott Garrett and Bill Huizenga which would require the Fed to provide Congress with a clear rule to describe the course of monetary policy. Now for the bad news. The rule is to be an equation showing how the Fed would adjust interest rates in response to changes in certain economic variables. And the star witness before the committee proposing his own version of such a rule is renowned neo-Keynesian economist, ex-Bush official Professor John B. Taylor.
Monday, July 21, 2014
The Municipal Bond World, / Interest-Rates / International Bond Market
By: Frank_Holmes
According to John Derrick
As we move into the second half of 2014, the Federal Reserve has continued to reduce its stimulus measures intended to boost the U.S. economy. Just last week we heard rumors from Fed officials that if the job market improves faster than expected, key interest rates may be increased sooner than expected.
Saturday, July 19, 2014
U.S. Bond Yield Carry Traders Need To Fade Upcoming Econ Events / Interest-Rates / US Bonds
By: EconMatters
Fading Strong Employment Reports
The trend in the bond markets the last several months, and basically all of 2014 has been to buy bonds in the dead periods of econ reports, or the econ reports that would be detrimental to their non-growth, more dovish Fed case. And the last several weeks have been similar to the prior months, basically wait for the stellar job`s report blows yields up to 2.70% on the 10-Year and then buy bonds, pushing down yields in the three weeks after the Employment Report, with the goal of getting out before the next Employment Report.
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Thursday, July 17, 2014
The Fed Needs to Raise U.S. Interest Rates Now! / Interest-Rates / US Interest Rates
By: EconMatters
ZIRP Policy & Asset Valuations
The conditions in so many asset classes are unsustainable from a price perspective once interest rates rise even under a “new normalized rate environment” and the longer rates stay at ZIRP status these unsustainable price levels continue to move in the wrong direction from a sustainability standpoint, i.e., the underlying fundamentals apart from ZIRP policy would not support said asset prices in a natural price discovery process.
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Monday, July 14, 2014
Pimco Steals AIG’s Bond Fund Insurance Playbook / Interest-Rates / US Bonds
By: Michael_Pento
Pimco is putting all their chips on the table, betting that low interest rates, along with lower and more stable global growth, will last for the next 3 to 5 years; an economic condition it is referring to as the "new neutral".
In fact, the company is so convinced of this "sure thing", it's placing a straight bet--selling insurance against price fluctuations on their $230bn flagship bond fund Pimco Total Return. That means it is offering investors price stability in the bond portfolio, in return for a premium.
Monday, July 14, 2014
Fed Officials Trying to Warn Bond Markets / Interest-Rates / US Bonds
By: EconMatters
The Purpose of Complacency Talk
The Fed officials have been coming out in speeches the last couple of weeks with rhetoric about ‘complacency’ and other such code words for chasing risk ahead of what the Federal Reserve knows is going to be an abrupt change in monetary policy over the next six months.
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Saturday, July 12, 2014
The Bond Rally is Not a Good Omen for the Stock Market / Interest-Rates / US Bonds
By: Sy_Harding
The Fed says the economy remains healthy enough that it will continue to taper back its QE stimulus at a rate of $10 billion a month, with plans to have it at zero by October.
Speculation now is on when it will begin the next step toward returning its monetary policy to normal, by beginning to raise interest rates from their current level near zero.
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Saturday, July 12, 2014
U.S. Fed Inside Thoughts on Inflation and Raising Interest Rates / Interest-Rates / US Federal Reserve Bank
By: Bloomberg
In an interview on Bloomberg TV's "Market Makers" with Mike McKee, Philadelphia Fed President Charles Plosser said the Fed is getting closer to its objectives for full employment and price stability. He said, "The data keeps telling us we ought to be raising rates" and that "If we wait too long, we could find ourselves raising rates faster and higher than we want to."
Thursday, July 10, 2014
QE Asset Bubbles Out of Gas / Interest-Rates / Quantitative Easing
By: Michael_Pento
I've written exhaustively about the real purpose behind the Fed's quantitative easing strategy. So one more time for those who still don't get it; the primary goal of QE is to bolster banks' balance sheets through the process of re-inflating equity and real estate prices. If investors look back at the history of QE they will be able to clearly see what happens when the Fed steps on the monetary gas; and also what occurs once it takes the foot off the pedal.
Tuesday, July 08, 2014
This Could End Up as the Biggest Ponzi Finance Scheme in History / Interest-Rates / International Bond Market
By: Money_Morning
Michael E. Lewitt writes: The great economist Hyman Minsky coined the term "Ponzi finance" to describe the situation when borrowers use more borrowed money to pay their debts.
The U.S. government engages in Ponzi finance every day since it is incapable of repaying the more than $17 trillion it has borrowed.
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Tuesday, July 08, 2014
Bond Market Prices in a Rising Rate Environment / Interest-Rates / US Bonds
By: Richard_Shaw
JP Morgan Asset Management put out their Q3 2014 market outlook in which they discuss bond performance in a rising rate market. You should be aware of the key points they make.
In this table, JPM explains how a 1% interest rate change would impact each of several types of bonds:
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Thursday, July 03, 2014
Bombs er Bonds, Debacle at Our Doorstep! / Interest-Rates / US Bonds
By: Ty_Andros
The breathtaking rush into the perceived safety and stability of the Bomb er Bond markets which began at the depths of the 2008 Global financial crisis are in blow off mode. A recent Bank of international settlements annual report has been ignored due to its message of CAUTION. The main stream media routinely blacks out these messages and have done so this time. Frenzied reach for yields are occurring throughout the world.
Wednesday, July 02, 2014
Rising Interest Rates... Falling Bonds / Interest-Rates / US Bonds
By: Anthony_Cherniawski
TNX took off like a bottle rocket for a second day, overcoming its 50-day Moving Average at 25.87 and mid-Cycle support/resistance at 25.92. It should complete Minor Wave 1 of (3) near the hourly Cycle Top at 26.73.
This is Primary Cycle action and it may not be over until July 25 to July 29.
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Wednesday, July 02, 2014
Planning for Future Interest Rate Hikes: What Can History Tell Us that the Fed Won’t? / Interest-Rates / US Interest Rates
By: F_F_Wiley
It stands to reason that when the Fed eventually lifts interest rates, we’ll see the usual effects. After a sustained rise in rates, you can safely bet on:
- Fixed investment and business earnings dropping sharply
- GDP growth following investment and earnings lower
- Many people losing their jobs
- Risky assets performing poorly
Tuesday, July 01, 2014
Debt Makes You Dumb - American's Borrowing Just To Get By / Interest-Rates / US Debt
By: John_Rubino
As incomes stagnate and prices rise, a growing number of Americans face a tough choice: either descend a couple of rungs on the lifestyle ladder or borrow to keep it together. Many are apparently choosing door number two. From MarketWatch:
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Tuesday, July 01, 2014
Lowest Interest Rates in 500 Years, Oil Shortages in 10 Years / Interest-Rates / Financial Markets 2014
By: Raul_I_Meijer
We all know that interest rates are at an ultra low level, whether it’s the rate on our savings accounts, our mortgages (though those are quite a bit higher, quelle surprise), central bank rates or yields on government bonds. All this, plus a watershed of global QEs, have led to stock exchanges at highs that have nothing at all to do anymore with the performance of the real economies they’re supposed to represent – and historically did.
Tuesday, June 24, 2014
QE And CDS Are Weapons Of Mass Deception / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
The age of financial innnovations found such an exalted high priest in Alan Greenspan that in his days as Fed governor he couldn’t stop talking about the dangers of regulating them, even though that was in his job description, and even though he had far too little detailed knowledge of them. His sidekicks over at the Treasury, Bob Rubin and Larry Summers, made sure their friends at Citi and JPMorgan had nothing to fear from the US government in this regard either, just as Glass-Steagall was repealed.
Tuesday, June 24, 2014
Europe’s Mario Draghi Now Starring in Bernanke’s Show / Interest-Rates / ECB Interest Rates
By: MISES
Brendan Brown writes: Just as Professor Bernanke exits center stage at the end of Act I of the monetary comedy he created, the scene shifts to Frankfurt. The star of Act II is European Central Bank (ECB) chief Mario Draghi. As we pick up the story, Mr. Draghi has been launching a defense against a phantom threat of deflation.