yield curve

Treasuries, Sure, What About Other Government Bond Curves?

By |2022-04-05T19:53:14-04:00April 5th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The US Treasury curve, as you might have heard, is inverted. After today’s repeat sell-off, it’s a little less inverted than it had been recently (un-inverted in the 2s10s, which isn’t unusual) given how yields closed at the longer end up more than those up front and middle. The zig-zag back and forth of ultra-short run market fluctuations continues.But what [...]

Curve Wars: Short Follows Long Because It’s *Never* Just One Part or One Curve

By |2022-04-04T17:52:51-04:00April 4th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Why is the yield curve so steep up at its front? The obvious answer is “rate hikes” and while technically true this leaves out an important set of historical facts. These are that the agency responsible for the rate hikes will, undoubtedly, stick with them regardless of actual conditions on the ground until a forward time when doing so could [...]

Weekly Market Pulse: What Now?

By |2022-04-04T06:47:23-04:00April 3rd, 2022|Alhambra Portfolios, Bonds, Commodities, Currencies, Markets, Real Estate, Stocks|

The yield curve inverted last week. Well, the part everyone watches, the 10-year/2-year Treasury yield spread, inverted, closing the week a solid 7 basis points in the negative. The difference between the 10-year and 2-year Treasury yields is not the yield curve though. The 10/2 spread is one point on the Treasury yield curve which is positively sloped from 1 [...]

The Short, Sweet Income Case For Ugly Inversion(s), Too

By |2022-04-01T19:21:53-04:00April 1st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A nod to just how backward and upside down the world is now. The economic data everyone is made to pay attention to, payrolls, that one is, in my view, irrelevant. As is the consumer price estimates from earlier this week, the PCE Deflator. That’s another one which receives vast amounts of interest even though it is already old news.Yet, [...]

A(nother) Waste of Our Time

By |2022-04-01T17:57:42-04:00April 1st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s been a while, but the BLS finally got around to releasing a near-perfect payroll report. These had been incredibly common even during prior downturns and near recessions, which should only raise questions about them. Among any immediate concerns, how relevant can these data points be?In our current day, like the consumer price data, they’re already old news. That’s not [...]

JOLTS Three (Data) Body Problem

By |2022-03-29T20:00:23-04:00March 29th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Though labor data, like the market it measures, is a lagging macro indicator, there’s some use in closely tracking any changes to it. Financial markets may send out profound warning signals, as they are now, about the future which aren’t (yet) showing up in the employment statistics, still those estimates might provide at least some background behind in this case [...]

We Can Only Hope For Another (bond) Massacre

By |2022-03-28T20:26:11-04:00March 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

To begin with, the economy today is absolutely nothing like it had been almost thirty years ago. That fact in and of itself should end the discussion right here. However, comparisons will be made and it does no harm to review them.I’m talking about 1994, or, more specifically, the eleven months between late February 1994 and early February 1995. Fearing [...]

Inversions And Inventory, The Major Products of October

By |2022-03-28T18:21:31-04:00March 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What happened in October 2021? Another year’s Halloween, sure, some beerfest gluttony around the world. For all the happy revelries in that month the financial markets took a decidedly ominous turn. It hadn’t exactly been all rainbows and unicorns in them before then, yet they were at least stable to slightly optimistic about the future for 2022 or beyond.The list [...]

Weekly Market Pulse: The Cure For High Prices

By |2022-03-28T07:45:44-04:00March 27th, 2022|Alhambra Portfolios, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

There's an old Wall Street maxim that the cure for high commodity prices is high commodity prices. As prices rise, two things will generally limit the scope of the increase. Demand will wane as consumers just use less or find substitutes. Supply will also increase as the companies that extract these raw materials open new mines, grow more crops, or [...]

Long-end Inversion *Does* Indicate Recession Risks Are Actually Elevated

By |2022-03-24T20:45:44-04:00March 24th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What can we make of the fact the US Treasury yield curve inverted between the 7-year and 10-year maturities first? It only took a few more days for more of the curve to bend upside-down, yet that just means the whole middle part is where the bad vibes are congregated. Does this somehow disqualify what would otherwise be a clear [...]

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