Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, July 05, 2017
Will Trump Fire Yellen or Vice Versa / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
Citigroup’s Economic Surprise Index just hit its lowest level since August 2011. But this level of disappointment has ironically emboldened the Fed to step up its hawkish monetary rhetoric. The truth is that the hard economic data is grossly missing analyst estimates to the downside as the economy inexorably grinds towards recession. This anemic growth and inflation data should have been sufficient to stay the Fed's hand for the rest of this year and cause it to forgo the unwinding of its balance sheet.
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Monday, July 03, 2017
NY Fed President Just Admitted Ignoring The Bond Market… I Have A Theory / Interest-Rates / US Bonds
By: John_Mauldin
Speaking at a Business Roundtable event, New York Fed President William Dudley reportedly expressed great confidence in both the economy and the Fed’s policy moves.
Dudley is not even slightly concerned about the Fed’s overshooting with its rate hikes. In fact, he is supremely confident that inflation will overshoot if the Fed doesn’t tighten policy.
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Sunday, July 02, 2017
Central Bankers Just Lit the Fuse on a $217 TRILLION Debt Bomb / Interest-Rates / Global Debt Crisis 2017
By: Graham_Summers
As we noted yesterday, the world’s Central Banks have begun sending signals that the price of money in the financial system (bond yields) is going to be rising.
Why is this a big deal?
Because globally the world has packed on $68 TRILLION in debt since 2007. And ALL of this was issued based on the assumption that bond yields would be remaining at or near record lows.
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Sunday, July 02, 2017
Janet Yellen Just Said The Most Ridiculous Thing We’ve Heard All Year! / Interest-Rates / US Interest Rates
By: Jeff_Berwick
Of all people, the last person you should ever ask about what is going to happen in the economy is a central banker or a Keynesian economist.
They are, after all, communists trying to centrally plan the economy. Commies are always clueless about economics.
And, their track record of predicting the economic future is almost perfect in that they almost always say “this time things are different” just moments before another crash happens.
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Saturday, July 01, 2017
Sovereign Debt Jubilee, Japanese-Style. The US National Debt / Interest-Rates / Global Debt Crisis 2017
By: Ellen_Brown
Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.
Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.
A lot of interest.
If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.
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Thursday, June 29, 2017
The Fed Is Pursuing An After-Me-The-Deluge Monetary Policy / Interest-Rates / US Interest Rates
By: John_Mauldin
I think there is a mixture of political bias and legacy-building that is driving Federal Reserve policy. The simple fact is that the Fed should have been normalizing interest rates starting in 2013.
Fifty basis points a year, and we would be at 2% now. That is not exactly a torrid rate-hike path. It cannot be seen as putting your foot on the brakes. It’s simply moving to normalize a situation that everybody realizes is abnormal.
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Tuesday, June 27, 2017
Here’s Why Robots Should Take the Fed’s Job / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY PATRICK WATSON : The Federal Reserve hiked interest rates again last week.
Higher rates aren’t entirely bad. They might help savers holding cash—though I wonder why anyone would still hold cash after almost a decade of punishment. The Fed has forced Americans into riskier assets, using every tool but horsewhips.
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Tuesday, June 27, 2017
We Are Witnessing the Largest Twin Bubbles in History / Interest-Rates / Global Debt Crisis 2017
By: John_Mauldin
BY STEPHEN MCBRIDE : In the coming years, we will have to deal with the largest twin bubbles in history. It’s global debt (especially government debt) and the even larger bubble of government promises.
Together, these twin bubbles make up what John Mauldin calls “The Great Reset.” Nobody can tell how this crisis will play out, but one thing is for sure, it will affect everyone in a big way.
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Tuesday, June 27, 2017
The Federal Reserve And Drug Addiction – A Prediction / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
The Federal Reserve Bank was established in 1913. Its stated purpose was to control the economic cycles; more specifically to avoid panics and crashes by smoothing out the variances in the stages (prosperity, inflation, recession, depression) of the economic cycle.
The plan centered around control (expansion and contraction) of the money supply and exertion of any influence it could muster regarding direction (up, down, or stable) of interest rates.
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Tuesday, June 27, 2017
US Bonds and Related Market Indicators / Interest-Rates / US Bonds
By: Gary_Tanashian
Excerpted from the June 25 edition of Notes From the Rabbit Hole, which also included comprehensive analysis of US and global stock markets, commodities, precious metals and stock charts galore (with the Market Internals segment, in particular, having evolved into what I find to be a must-have guide).
TLT is now a buck from its target of 129. Tell me, where is all that mania about rising interest rates and the likes of the “R.I.P. Bond Bull Market” headlines (Bloomberg called the bottom almost to the day with that Louise Yamada hype). Now a mature bounce labors on. 129 does not need to stop the move, but it’s a long-standing marker, so…
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Tuesday, June 20, 2017
We’ve Entered A Period Of Maximum Monetary Uncertainty / Interest-Rates / US Interest Rates
By: John_Mauldin
BY PATRICK WATSON : America is fully employed, or so say the statistics.
Federal Reserve officials think the job market is strong enough to justify higher interest rates. They’re afraid inflation will get out of control.
But if inflation is a problem, it’s not yet apparent in the average worker’s paycheck. “Just wait,” the inflation hawks say.
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Monday, June 19, 2017
US Bonds and Related Market Indicators / Interest-Rates / US Bonds
By: Gary_Tanashian
The June 18 edition of Notes From the Rabbit Hole has a few less stock charts this week in order to ramp up the macro talk, which appeared periodically through the report; but especially in the Precious Metals and Bonds segments. Excerpted from NFTRH 452…
Bonds & Related Indicators (and more macro discussion)
The target for TLT continues to be around 129. Treasury bonds are in bull trends (remember back a few months ago to all the bond hatred in the media). How does an eventual decline in bonds square with what we just noted above regarding Q4 2008? [work done in the preceding Precious Metals segment] Treasury bonds were a wonderfully bullish asset during Armageddon ’08 and who’s to say that an upside blow off may not be coming sooner rather than later amid massively over bullish sentiment? I mean, there is certainly no stop sign at our 129 target. Sentiment, as we are all too aware, can take a long while to manifest in pricing.
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Saturday, June 17, 2017
Here Comes Quantitative Tightening / Interest-Rates / US Interest Rates
By: Peter_Schiff
All of a sudden the Fed got a little tougher. Perhaps the success of the hit movie Wonder Woman has inspired Fed Chairwoman Janet Yellen to discard her prior timidity to show us how much monetary muscle she can flex when the time comes for action.
Although the Fed's decision this week to raise interest rates by 25 basis points was widely expected, the surprise came in how the medicine was administered. Most observers had expected a "dovish" hike in which a slight tightening would be accompanied by an abundance of caution, exhaustive analysis of downside risks, and assurances that the Fed would think twice before proceeding any farther. But that's not what happened. Instead Yellen adopted what should be viewed as the most hawkish policy stance of her chairmanship.
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Tuesday, June 13, 2017
The Everything Bubble, Return Of The Subprime Mortgage / Interest-Rates / Subprime Mortgage Risks
By: John_Rubino
This cycle’s main bubble is in government bonds and fiat currencies, with a dash of large-cap tech thrown in for variety. But like a hurricane spawning tornadoes at its periphery, this Money Bubble is creating secondary bubbles like student debt and subprime auto loans that are impressively destructive in their own right.
An example of how extreme things have gotten is US housing, which — as the previous decade’s main bubble — wasn’t supposed to be a problem this time around. But apparently no sector is immune from all that excess central bank liquidity. As today’s Wall Street Journal notes, the subprime mortgage is now being resurrected:
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Monday, June 12, 2017
Prepare for the Great Monetary Shift / Interest-Rates / Global Debt Crisis 2017
By: Dan_Steinbock
As advanced economies struggle with stagnation, one monetary era is about to change. After a decade of massive easing, the US Fed is hiking rates and moving to reduce its massive $4.5 trillion balance sheet. There are no historical precedents but there will be global repercussions.As the central banks of major advanced economies are pondering the shift from massive easing to gradual tightening, all other nations must adjust to these huge shifts, whatever their current status quo.
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Thursday, June 08, 2017
The Subprime 2.0 Debt Bubble is About to Burst / Interest-Rates / Global Debt Crisis 2017
By: Graham_Summers
As we’ve been outlining for weeks now, Subprime 2.0 is the subprime auto-loan industry. And just as the collapse in the subprime mortgage lending was what signaled the beginning of the housing crisis… trouble in the subprime auto-loan industry will be what signals that the next Debt Crisis is here.
Tuesday, June 06, 2017
US Interest Rate Curve Inversion and Chaos to Begin by December 2017 / Interest-Rates / US Interest Rates
By: Michael_Pento
The bounce in Treasury yields witnessed after the election of Donald Trump is now decaying in the D.C. swamp. If the Fed continues to ignore this slow growth and deflationary signal from the bond market and continues along its current rate hiking path, the yield curve will invert by the end of this year and an equity market plunge and a recession is sure to follow.
An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates. Why is an inverted yield curve so crucial in determining the direction of markets and the economy? Because when bank assets (longer-duration loans) generate less income than bank liabilities (short-term deposits), the incentive to make new loans dries up along with the money supply. And when asset bubbles are starved of that monetary fuel they burst. The severity of the recession depends on the intensity of the asset bubbles in existence prior to the inversion.
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Tuesday, June 06, 2017
Government Insolvency Gets Harder to Ignore / Interest-Rates / US Debt
By: MoneyMetals
Several U.S. states and the federal government are hopelessly insolvent. It’s something many bullion investors have known for years.
The real question is when this reality will pierce the mainstream illusion that deficits, and the crushing pile of debt which accompany them, don’t matter. That moment drew closer last week when ratings agencies downgraded Illinois state bonds to one notch above “junk” status.
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Monday, June 05, 2017
From the Era of Fed Interest Rates Easing to the Era of Tightening / Interest-Rates / US Interest Rates
By: Dan_Steinbock
After half a decade of ultra-low rates in the United States, the Fed is hiking rates and moving ahead to reduce its massive $4.5 trillion balance sheet. The consequences will reverberate across the world, including Asia.Before the Trump era, the Federal Reserve hoped to tighten monetary policy more often and aggressively than markets anticipated. But since November, US economic prospects have fluctuated dramatically, from the Trump trade to new volatility.
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Monday, June 05, 2017
Soaring Debt = Slow Growth = Even More Debt = Systemic Crisis / Interest-Rates / US Debt
By: John_Rubino
It’s just common sense: Borrow too much money and the weight of this debt makes it hard to do things that used to be easy. This truism is now (finally!) hitting home, and blame is being apportioned. A couple of recent examples:
Read full article... Read full article...Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s
(Economic Collapse Blog) – Even though I write about our ongoing long-term economic collapse every day, I didn’t realize that things were this bad. In this article, I am going to show you that the average rate of growth for the U.S. economy over the past 10 years is exactly equal to the average rate that the U.S. economy grew during the 1930s.