Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, December 15, 2017
Trends in the U.S. Unemployment rate and the U.S. Yield curve / Interest-Rates / US Interest Rates
By: Donald_W_Dony
The trends in both the U.S. Unemployment rate and the U.S. Yield curve are linked to similar economic pressures.
The Unemployment rate rises and falls due to a number of key reasons and reflects the changes in the economy.
The U.S. Yield curve acts as a tool for the Fed to conduct its monetary policy in its goal for the long-term health (ie stable prices and sustainable employment) of the economy.
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Tuesday, December 12, 2017
Which Central Bank Will Go Under First When the Everything Bubble Bursts? / Interest-Rates / Central Banks
By: Graham_Summers
In the aftermath of the Great Financial Crisis, Central Banks began cornering the sovereign bond market via Zero or even Negative interest rates and Quantitative Easing (QE) programs.
The goal here was to reflate the financial system by pushing the “risk free rate” to extraordinary lows. By doing this, Central Bankers were hoping to:
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Tuesday, December 12, 2017
A Former Wall Street Veteran: Good Traders Are Born, Not Trained / Interest-Rates / Learn to Trade
By: John_Mauldin
BY JARED DILLIAN : Some people are better with money than others. Is it nature or nurture?
What I mean is: Can investing be taught, or does it come naturally?
I’m going to make a very controversial statement. Financial acumen is almost entirely nature. You are born with it.
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Monday, December 11, 2017
Soaring Deficits Force US Treasury into Foolish Debt Gamble / Interest-Rates / US Debt
By: Michael_Pento
The Treasury opened the fiscal year 2018 with an October budget deficit of $63.2 billion. That is 37.9% larger than the $45.8 billion deficit in October of last year. The primary reason behind this surge in year-over-year deficits was a 21.6% increase in net interest expenses. The annual red-ink problem looks even greater when recognizing that the national debt is already over 105% of Gross Domestic Product (GDP), at nearly $21 trillion, and with an additional $10 trillion projected to be added in the next ten years.
Saturday, December 09, 2017
Jerome Powell vs. Janet Yellen / Interest-Rates / US Federal Reserve Bank
By: Arkadiusz_Sieron
As expected, Donald Trump nominated Jerome Powell as the next Federal Reserve Chair. He is often perceived as a merely Republican version of Yellen. But is that really the case? Let’s analyze in a more detailed way what impact on gold Powell’s term as the head of the U.S. central bank would mean for the gold market.
Tuesday, December 05, 2017
Central Banks Won’t See Our Sympathy / Interest-Rates / Central Banks
By: Rodney_Johnson
It’s official. Lending institutions are having a tough time making loans.Don’t get me wrong, they still make money the old fashioned way: by borrowing from us through deposits on which they pay almost no interest, and then lending it long term to anyone that qualifies. But they’ve had to jack up their other fees because the traditional business plan just isn’t cutting it.
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Tuesday, November 28, 2017
The $76 Trillion Bond Market Is Forecasting Inflation. Are You Ready? / Interest-Rates / Inflation
By: Graham_Summers
This year, (2017) was the year that the financial system moved from fearing deflation to expecting inflation.
You can see this in the breakout in inflation expectations. From 2013 until mid-2016, the financial system’s expectations of future inflation were in a downtrend. Mid-2016 this changed as expectations began to rise, breaking this downtrend in early 2017.
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Tuesday, November 28, 2017
The Fed Is at the Height of Monetary Policy Lunacy / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
How often do central bankers, regulators, corporate leaders, lawyers, politicians, and ordinary investors make the same mistakes over and over again? All the time.
If we stopped erasing our memories and for once learned from our mistakes, we might make better progress. But no, we must always step on the same rake.
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Wednesday, November 22, 2017
New Fed Chairman, Same Old Story / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
President Trump nominated Jerome H. Powell as the new Chairman of the Federal Reserve Bank. Don’t look for much to change. And Janet Yellen’s announcement that she will resign from the board upon Mr. Powell’s induction as board chair is pretty much a non-event.
Where we are today is the culmination of decades of irresponsible financial/fiscal policies and a complete abdication of fundamental economics. But that should not be a surprise. The self-proclaimed purpose of the Federal Reserve Bank is to manage the economic cycles. This is an impossibly presumptive task and a violation of fundamental economic theory.
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Tuesday, November 21, 2017
US Bond Market Operation Twist by Another Name and Method? / Interest-Rates / US Bonds
By: Gary_Tanashian
The TIP/IEF ‘inflation gauge’ is still motoring upward after breaking above the SMA 200. If this turns the 200 up along with the MA 50 it could indicate a mini hysteria about inflation.
Monday, November 20, 2017
Soaring Deficits Force US Treasury into Foolish Debt Gamble / Interest-Rates / US Debt
By: Michael_Pento
The Treasury opened the fiscal year 2018 with an October budget deficit of $63.2 billion. That is 37.9% larger than the $45.8 billion deficit in October of last year. The primary reason behind this surge in year-over-year deficits was a 21.6% increase in net interest expenses. The annual red-ink problem looks even greater when recognizing that the national debt is already over 105% of Gross Domestic Product (GDP), at nearly $21 trillion, and with an additional $10 trillion projected to be added in the next ten years.
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Sunday, November 19, 2017
Next-Generation Crazy: The Fed Plans For The Coming Recession / Interest-Rates / Recession 2018
By: John_Rubino
Insanity, like criminality, usually starts small and expands with time. In the Fed’s case, the process began in the 1990s with a series of (in retrospect) relatively minor problems running from Mexico’s currency crisis thorough Russia’s bond default, the Asian Contagion financial crisis, the Long Term Capital Management collapse and finally the Y2K computer bug.
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Friday, November 17, 2017
The Fed Isn’t “Confused” About Inflation… It WANTS You In the Dark! / Interest-Rates / Inflation
By: Graham_Summers
The Fed claims it’s “confused” as to why inflation remains so low.
The Fed isn’t confused at all. It intentionally measures inflation in ridiculous ways to guarantee that the “official number” remains nowhere near reality.
On top of this, we have factual evidence that Fed is in fact well aware that inflation is clocking in well above its 2% “target.”
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Thursday, November 09, 2017
Prepare For Interest Rate Rises And Global Debt Bubble Collapse / Interest-Rates / Global Debt Crisis 2017
By: GoldCore
– Diversify, rebalance investments and prepare for interest rate rises
– UK launches inquiry into household finances as £200bn debt pile looms
– Centuries of data forewarn of rapid reversal from ultra low interest rates
– 700-year average real interest rate is 4.78% (must see chart)
– Massive global debt bubble – over $217 trillion (see table)
– Global debt levels are building up to a gigantic tidal wave
– Move to safe haven higher ground from coming tidal wave
Wednesday, November 08, 2017
If This Bond Market Line Breaks, We’re in Serious Trouble / Interest-Rates / US Bonds
By: Graham_Summers
Let’s talk about Junk Bonds.
Junk Bonds are corporate debt issued by companies that have a significant chance of defaulting (meaning they don’t pay you back).
Why would anyone want to lend these companies money?
Because these bonds are risky, they typically pay very large yields to compensate for the increased risk. Think yields of 8% or even 10%.
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Wednesday, November 08, 2017
Here’s Why The Market Mispriced Jay Powell / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY JARED DILLIAN : Jay Powell has been named the next Chairman of the Federal Reserve. Provided he survives the confirmation process, it is a done deal.
This wasn’t the easiest pick for Trump. It’s not easy to find a Republican who is also in favor of low interest rates. Powell isn’t exactly a dove, but he’s significantly more dovish than John Taylor.
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Thursday, November 02, 2017
Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England with much forewarning hiked UK interest rates by 100% today, raising the base interest rate from 0.25% to 0.5%. However, before everyone starts to panic that this heralds the start towards of rates rising to pre 2008 levels, instead the reality is that all that the Bank of England has done is to reverse the PANIC BREXIT INTEREST RATE CUT of August 2016. Which had seen the Bank of England cut interest rates to there lowest levels in the Bank of England's 320 year history. Which followed over 7 years of rates being held at 0.5% the duration of which had seen virtually ALL economists reveal the true extent of their ineptitude as they had collectively consistently forecast that UK Interest rates were always just about to head higher, that a a series of rate hikes were always just months away, which not only never materialised but culminated in the reality of a RATE CUT last year!
Thursday, November 02, 2017
Who Will Be the Next Fed Chief - And Why It Matters / Interest-Rates / US Federal Reserve Bank
By: Dan_Steinbock
Janet Yellen's term is ending at the Federal Reserve. With new appointments, President Trump can indirectly shape US monetary policy for years to come - for better or worse. Serving as the “epitome of calm,” Fed chief Ben Bernanke responded to the global financial crisis by cutting the federal funds rate to zero and initiating rounds of quantitative easing (QE) soon thereafter.
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Thursday, November 02, 2017
Government Finances and Gold - Cautionary Tale told in Four Charts / Interest-Rates / US Debt
By: Michael_J_Kosares
“President Trump, in complete contradiction to candidate Trump, has praised Yellen for being a ‘low-interest-rate-person.’ One reason Trump may have changed his position is that, like most first-term presidents, he thinks low interest rates will help him win reelection. Trump may also realize that his welfare and warfare spending plans require an accommodative Fed to monetize the federal debt. The truth is President Trump’s embrace of status quo monetary policy could prove fatal to both his presidency and the American economy.” – Ron Paul, Institute for Peace and Prosperity
Editor’s note: This issue of our newsletter features several interactive, live charts offered in conjunction with the St. Louis Federal Reserve and the ICE Benchmark Administration/LBMA. You can access statistical details by moving your cursor over the charts. If the chart does not automatically update, please move the toggle button on the year bar all the way to the right. We invite you to bookmark this edition for future reference.
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Wednesday, November 01, 2017
QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate / Interest-Rates / Quantitative Easing
By: F_F_Wiley
We’ve produced some research over the years that we’d love to see the powers-that-be react to, but none more so than our look at financial flows during the QE programs.
By netting all lending by banks and broker-dealers and then comparing it to the Fed’s lending, we stumbled upon a chart that seemed to show exactly what QE does or doesn’t do. But “doesn’t,” not “does,” was the story, and it couldn’t have been clearer. Or shown a more stimulating pattern. To geeks like us, our Excel click on “Insert, Line” was like stepping from a shady trail to a sunny vista.
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