If the Fed cuts rates near 3%, historical yield curve spreads imply a 2-year yield near 3.60%, its current level. 10-year yields would project near 4.60%, 80 basis points higher than their current level.
Today's topics include PBOC pulls out stimulus bazooka, China also attempts to shore up property market, Chinese 10-year yields touch 2%, is the Federal Reserve's importance overstated?, checking in on liquidity, an October hike unlikely for the BoJ, money market funds sticking with shorter-term bills, home prices, and bonds ETFs gain in popularity
A replay of our September 26, 2024 conference call.
The Index of Leading Economic Indicators’ failure to predict the post-Covid economy should be a reminder that this is no longer the pre-Covid economy. Assuming the economy “normalizes” to the pre-Covid economy risks policy mistakes.
The Index of Leading Economic Indicators' failure to predict the post-Covid economy should be a reminder that this is no longer the pre-Covid economy. Assuming the economy "normalizes" to the pre-Covid economy risks policy mistakes.
While the odds of a Harris presidency have been trending higher post-debate, the broad measures of betting markets, polling averages, and models are best described as too close to call. The election is now forty-three days away.
Today's topics include market reactions in year after first rate cut, making the case that this time is different, markets see coin flip in November between 25 and 50, yields inch higher after rate cut, the yield curve's predictive power, big bank profits, are money market funds dry powder for risk markets?, small cap stocks go streaking, gold vs. stocks since 2002, and crypto is a leveraged bet on stocks
Today's topics include the prospects of future easing, dissents at the Fed, focusing on the neutral rate, Dudley on the Fed's reasoning for 50bp cut, BofA's Hartnett focuses on resurgence of bubble risk, China holds rates even with economic activity deteriorating, capturing yield in junk bonds as the Fed cuts rates, Fed moves in election cycles, and struggles of active management in a concentrated market
A look at outstanding amounts of Treasuries, corporates, agencies, munis and open market paper