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Bonds & Interest Rates

Bill Gross: Fed won't be able to follow through with its plans

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Posted by Bill Gross via CNBC

on Thursday, 15 June 2017 06:22

  • Screen Shot 2017-06-15 at 6.56.48 AMThe Fed released a hawkish statement on Wednesday, but it's doubtful the central bank will ultimately be able to reach its goal, Bill Gross told CNBC.
  • The Fed is maintaining its projection for a federal funds rate at 2.1 percent in 2018, according to the chart that has become known as the "dot plot."
  • He thinks the fed funds rate can go no higher than 1.5 to 1.75 percent over time given current economic conditions.

The Federal Reserve released a hawkish statement on Wednesday, but it's doubtful the central bank will ultimately be able to reach its goal, noted bond investor Bill Gross told CNBC on Wednesday.

...continue reading HERE

...also from Bill:

Bill Gross warns U.S. market risk is at highest since 2008 crisis



Bonds & Interest Rates

Treasury Snapshot: Possible Reversal Continues

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Posted by Jill Mislinski - Advisor Perspectives

on Wednesday, 14 June 2017 09:12


Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended the day at 2.21% and the 30-year bond closed at 2.86%, well off their interim highs.

Here is a table showing the yields highs and lows and the FFR since 2007 as of today's close.

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The 2-10 yield spread is now at 0.86%.

The chart below shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since the pre-recession days of equity market peaks in 2007.

Treasury Yields since 2007

A Long-Term Look at the 10-Year Note Yield

A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 Oil Embargo that triggered the era of "stagflation" (economic stagnation with inflation). The trendline (the red one) connects the interim highs following those stagflationary years. The red line starts with the 1987 closing high on the Friday before the notorious Black Monday market crash. The S&P 500 fell 5.16% that Friday and 20.47% on Black Monday.

...continue HERE to view chart & commentary

 



Bonds & Interest Rates

The Inside Scoop On What's Going On At The Fed On What's Going On At The Fed

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Posted by Michael Campbell & Dr. Michael Berry PhDBerry PhD

on Monday, 29 May 2017 08:08

Dr. Michael Berry is the go-to guest when it comes to parsing the tea leaves of the central banks, the US Federal Reserve which has singularly  the largest impact on interest rates, stock markets & commodity pricing.

....also: When People Pay No Price For Being Wrong

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Bonds & Interest Rates

Interest Rates Up & Bonds Up?

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Posted by Martin Armstrong - Armstrong Economics

on Friday, 26 May 2017 06:18

UBCBT30-M-5-25-2017

While the Fed may be raising rates, there is still a flight to quality underway that is giving a bid to US Treasury issues. Low Treasury yields may remain the norm even if the Federal Reserve raises rates again. At about 2.25%, 10-year yields have dropped to 2017 lows, even with the central bank signaling an imminent rate hike. Many still see the stock market crash and that also supplies a bit of an underlying bid right now. However, The Fed has also made it clear it will maintain a gradual approach to shrinking its massive bond portfolio thereby reversing the Quantitative Easing. We are in never-never-land where the Fed tightening will not yet have a direct impact upon the bonds on a one-for-one relationship.

....continue reading and view 3 more charts

....related from Martin:

US Pension Crisis Picking Up Full Speed

 



Bonds & Interest Rates

Markets Should Fear Central Banks More Than Trump

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Posted by Michael Pento - Pento Portfolio Strategies

on Tuesday, 23 May 2017 08:18

trump-trade-crash-768241Trump’s economic agenda has become further delayed by what seems like daily leaks from the White House. This may finally bring about the long-awaited equity market pullback of at least 5 percent. However, what will prove to be far more troubling than Trump’s ongoing feuds with the DOJ and the press, is the upcoming market collapse due to the removal of the bids from global central banks.

The markets have been feeding off artificial interest rates from our Federal Reserve and that of the European Central Bank and the Bank of Japan for years. In addition, the global economy has been stimulated further by a tremendous amount of new debt generated from China that was underwritten by the PBOC. After it reached the saturation point of empty cities, China is now building out its “Belt and Road Initiative” that could add trillions of dollars to the debt-fueled stimulus scheme that has been spewed out over the world-wide economy.



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