Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, October 08, 2023
US Bond Market Opportunity - IBTL.L $279- US Treasury 20+yr / Interest-Rates / US Bonds
By: Nadeem_Walayat
IBTL.L $279- US Treasury 20+yr - US Equiv TLT ETF
Peaked at $523, collapsed to it's recent low of near 50% to $276, imagine all those who swallowed the financial advisors and media sales pitch to be 60% in bonds because they are 'lower risk' then stocks! This is HORRIFIC! MORE THAN DOUBLE THE RISK FOR A FRACTION OF THE RETURN OF STOCKS! HORRIFIC! Still it gives a higher volatility potential to accumulate into right now. Potential upside over 2-4 years is for $422 for a 52% on the current price!
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Sunday, October 08, 2023
US Bond Market Opportunity - IBTM.L £135.8 - US Treasury 7-10Yr / Interest-Rates / US Bonds
By: Nadeem_Walayat
This bond fund is down 29% from it's high with potential upside target of £175 for a 27% gain over a target 2-4 years, so a lower / risk lower return component of the portfolio. I've been accumulating since £139 with limit orders ever £1 lower, as well as timed based buys.
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Sunday, October 01, 2023
UK and US Inverted Yield Curves and Bond Funds / Interest-Rates / Inverted Yield Curve
By: Nadeem_Walayat
Yield Curves
At the late 2021 peak of the stock market the US short end yield was zero, long end (20 year) at about 2%. so the yield curve was normal. By the time of the bear market low was starting to invert, with the short end 3.5% vs long end 3.8%, fast forward to day we have the short end at 5.5%, Whilst most recent yield action has seen the short end and the long end nudge higher, hence offering an opportunity to accumulate near the bond markets lows.
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Sunday, October 01, 2023
Investing in UK and US Bonds / Interest-Rates / International Bond Market
By: Nadeem_Walayat
And we arrive out our final destination, one of where doom and gloom prevails, most fear much higher BOND market interest rates! Where we have the likes of Bill Ackman literally announcing he is shorting US bonds AFTER they have fallen! Where were they a year go when that was the time to short bonds?
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Thursday, September 21, 2023
Why we won't see a repeat of the 1970's Rate Hikes / Interest-Rates / Global Financial System
By: Nadeem_Walayat
Doom merchants continue to run off to the 1970's rate hikes that culminated in eye watering 15% completely miss what's staring them in the face for why that CANNOT happen this time! It can't happen because Debt to GDP is triple that of the 1970's! 120% vs 40%, Raising the Fed funds rate to 15% again would be akin to a 45% rate today.
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Tuesday, September 12, 2023
Something Isn’t Adding Up as U.S. Debt Soars $2 Trillion in 2023 / Interest-Rates / US Debt
By: MoneyMetals
Precious metals markets retreated last week as official U.S. employment data came in surprisingly strong.The Labor Department reported that weekly jobless claims fell by 13,000 to a total of 216,000. Many economists had been expecting jobless claims to rise.
Of course, government economic data is subject to revision and to criticism for flawed methodology. But it still has the ability to move markets, at least in the near term.
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Sunday, September 03, 2023
US Bond Market Yield Curve Inversion Current State / Interest-Rates / Inverted Yield Curve
By: Nadeem_Walayat
The yield curve is the Ten Year yield Minus 2 Year Yield - What it shows is when short money is more expensive (higher rates) then long money, why is that? Forward economic weakness thus lower forward rates? Yes that is a valid argument but I suspect that in large part is the WRONG conclusion, it is after all the consensus view, what the econofools regurgitate across MSM, long rates are lower because the market is discounting future interest rate cuts is WRONG!
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Monday, July 24, 2023
The Fed as Bad Bank Ultimate Irony / Interest-Rates / US Federal Reserve Bank
By: Jim_Willie_CB
A historical paradigm shift is in progress. The process of de-Dollarization began with Russia in response to the Maidan coup in Kiev back in 2016. The Russian reacted in multiple ways, but the Eurasian Trade Zone grew. That was the Jackass name given, which has emerged as the BRICS Union in recent years. Numerous nations have followed the Russian lead in removing the USDollar from their trade payments and banking practices. The American observers have dismissed this trend as trivial and not enduring. They are wrong, dead wrong. In the last 18 months, the Japanese had dumped $240 billion in USTreasury Bonds over a 12-month period. They continue. They accumulate Gold in their banking reserves, thus following the BRICS theme, their operating policy. The macrocosm, by contrast, will feature 20 nations dumping USTBonds en masse, and acquiring Gold for banking reserves. The UAE will become a primary office for the conversion, their Dirham notably pegged to the USD.
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Sunday, June 18, 2023
Fed Claims It CAN Resume Rate Hikes While Doubts Grow / Interest-Rates / US Interest Rates
By: MoneyMetals
As the Federal Reserve begins to back off on tightening, the U.S. dollar is becoming increasingly vulnerable to selling.The Fed left its benchmark interest rate unchanged at just above 5% at this week's policy meeting. It was the first time in over a year that central bankers decided not to hike.
In his remarks, Fed chairman Jerome Powell tried to maintain a hawkish tone despite the dovish policy move. He vowed to deliver more rate hikes later this year.
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Friday, June 16, 2023
US Interest Rate A Pause Like Nonother / Interest-Rates / US Interest Rates
By: Michael_Pento
The Bank of Canada paused its rate hiking cycle in January but then hiked rates at its last meeting. The
Royal Bank of Australia paused in April but then had to start hiking again in June. The Fed also paused at
its June meeting or at least skipped a rate hike. This was the case even though core inflation rose 0.4%
month over month from April to May and was still up 5.3% from a year ago.
Tuesday, May 16, 2023
US Debt Ceiling Crisis Smoke and Mirrors Circus / Interest-Rates / US Debt
By: Nadeem_Walayat
It's definitely the time to bring out the clowns as MSM and much of the blogosfear are obsessed by the US debt ceiling smoke and mirrors circus that is being used as an excuse to explain potential market outcomes from a CRASH upwards, there is always a crash coming! And if the market soars then no problem it will soar because of debt ceiling positive developments, Whether UP or Down it will all be as a consequence of the DEBT CEILING! I have watched this circus take place every couple of years over the decades, it IS just a circus act for the Republicans and Democrats to prance around in front of the media, a smoke and mirrors TV show to remind the masses that they have all of the power and so if the chose to nuke the US economy.
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Saturday, April 29, 2023
Corporate Bonds: "The Next Shoe to Drop" / Interest-Rates / Corporate Bonds
By: EWI
"The neckline has been broken over the last few days"
A "calamity" is likely ahead for corporate bonds, says our head of global research, Murray Gunn.
Some of Murray's analysis involves the head and shoulders, a classic technical chart pattern. In case you're unfamiliar with it, here's an illustration along with an explanation from one of our past publications:
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Tuesday, April 18, 2023
US Treasury Bond Market Yield Curve / Interest-Rates / US Bonds
By: Nadeem_Walayat
That was one hell off a drop in the 2 year yield yesterday, went straight from 5% to 4%. Now US rates are on par with where they were when the S&P was trading at 4200, of course it's not as simple as that, the rate fell in response to the Fed bailout of the banking crime syndicate. Still this should be positive for stocks.
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Wednesday, April 12, 2023
Interest Rates Should Continue To Fall, Eventually Setting Up A Bond Market Crash / Interest-Rates / US Bonds
By: Avi_Gilburt
If you have been reading my public articles on TLT over the last half a year, then you would know of my expectation to see the bond market rally into 2023, and rates falling into 2023.
When I first put this expectation out last year, many (even some of my own clients) thought I was simply crazy. With rates skyrocketing towards 5%, most were quite certain that we would easily eclipse that point, and move well towards 6% and even higher. And, of course, the reason most maintained that expectation was due to the Fed’s public position of continuing to raise rates.
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Saturday, April 01, 2023
The Fed Knew / Interest-Rates / US Federal Reserve Bank
By: Richard_Mills
Should we leave the creation of new money in the hands of bankers or place its creation solely with our government?
“The financial system used by all national economies worldwide is actually founded upon debt. To be direct and precise, modern money is created in parallel with debt…
The creation and supply of money is now left almost entirely to banks and other lending institutions. Most people imagine that if they borrow from a bank, they are borrowing other people’s money. In fact, when banks and building societies make any loan, they create new money. Money loaned by a bank is not a loan of pre-existent money; money loaned by a bank is additional money created. The stream of money generated by people, businesses and governments constantly borrowing from banks and other lending institutions is relied upon to supply the economy as a whole. Thus the supply of money depends upon people going into debt, and the level of debt within an economy is no more than a measure of the amount of money that has been created.” Michael Rowbotham, ‘The Grip of Death’
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Sunday, February 26, 2023
Fed President Worried the Fed Risks a Repeat of the 1970s / Interest-Rates / Inflation
By: MoneyMetals
Gold and silver markets drifted lower again this week as investors braced for additional Fed rate hikes to come.
On Wednesday, the Federal Reserve released the minutes from its latest policy meeting. Policymakers agreed on the need for additional increases in interest rates. They settled on just a 0.25% bump up at their last meeting. But some dissenters called for a larger 0.5% hike.
Friday, December 30, 2022
Major Fed Myth: Debunked - Fed is Reactive in Setting Rates – Not Proactive / Interest-Rates / US Interest Rates
By: EWI
The days of near-zero interest rates are long gone -- at least for now.
As we look back on 2022, we know that it's been a year of rising interest rates, and many observers say it's all due to the Fed.
But it's a flat-out myth that the Fed determines the trend of interest rates. The market does. The Fed merely.
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Monday, December 26, 2022
US Debt Jubilee / Interest-Rates / US Debt
By: Richard_Mills
A cross-the-board ‘Debt Jubilee’ might sound radical, but a reading of history shows that retiring debt can actually make a country’s economy, and its indebted citizenry, all the better for it. There is even a relatively recent example. In 2000, U2 front man Bono launched a campaign to provide debt relief to developing countries. The Jubilee 2000 coalition managed to get the G8 to agree to write off $100 billion in debts that developing countries owed to developed nations.
The term ‘Jubilee’ comes from the Old Testament. The book of Deuteronomy refers to a sabbath year during which any slaves would be freed, and everyone would be allowed to return to their family farms and live off the land. During the Jubilee, all debt obligations would be forgiven — such as land or crops that debtors had pledged to creditors.
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Saturday, December 24, 2022
Why the Fed Intertest Rates Pivot will Happen Faster than People Think / Interest-Rates / US Interest Rates
By: Richard_Mills
Most market participants see the Fed’s tightening policy as similar to what Paul Volcker’s Fed did in the late 1970s, when double-digit inflation necessitated a cycle of rate hikes that brought the federal funds rate to 20%. Volcker succeeded in taming inflation but the price was the 1982 recession, considered one of the longest and worst in economic history.
There is one crucial difference between 1982 and 2022, and that is the debt. According to the FRED chart below, the US debt to GDP ratio in 1982 was around 35%. Today it is more than three times higher, at 120%.
This severely limits how much and how quickly the Fed can raise interest rates, due to the amount of interest that the federal government must pay on its debt.
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Thursday, November 24, 2022
Why INTEREST RATE HIKES Are INFLATIONARY! / Interest-Rates / Inflation
By: Nadeem_Walayat
Unfortunately I will have to leave this mostly for next time. But basically INTEREST RATE HIKES to bring INFLATION DOWN! Is NOT going to work because INTEREST RATES DO NOT CONTROL the RATE of INFLATION. So that which academics have built their whole careers on is BS! All I hear is Volcker raised rates that brought inflation down and so rinse and repeat, was it Interest rates that killed the Inflation of the 1970's? Are you sure your not lapping up the propaganda which is ECONOMICs perpetuated by the propaganda arms of Governments called central banks who's primary remit is to put up a smoke screen of misinformation so as to allow governments, to get away with printing money!
As I have voiced for well over a decade, Inflation is a function of governments PRINTING MONEY, of which QE is part of the equation i.e print money to monetize government debt, which despite all of the noise continues to this very day! Governments printing money on an epic scale for which the smoking gun is the Governments deficit spending, the US Federal Government is spending $1.4 trillion more than it earns in revenue that is PRINTING MONEY! For the UK it's about £120 billion,
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