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Bonds & Interest Rates

1st interest rate hike in 7 years

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Posted by Barrie McKenna

on Wednesday, 12 July 2017 10:56

rate increase

The Bank of Canada is hiking its key interest rate for the first time in seven years, joining the U.S. Federal Reserve in starting the process of undoing nearly a decade of easy money.

The bank raised its overnight lending rate to 0.75 per cent from 0.5 per cent Wednesday, citing “bolstered” confidence that the Canadian economy has finally turned the corner after years of sputtering growth... CLICK HERE for the full article



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Bonds & Interest Rates

Interest Rate Hike: 3 Ways It Affects Your Finances

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Posted by Tori Floyd, Yahoo Finance

on Tuesday, 11 July 2017 10:54

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It’s all but confirmed that the Bank of Canada will raise its key interest rate later this week. That prospect has many Canadians on edge, unsure of what to expect.

A report from RBC last week forecast that if interest rates were to rise one percentage point over the next year, it would mean households would end up paying an additional two cents for every dollar of income to serving debt. That amounts to the average Canadian household (with a median income of $78,870) paying about $130 more each month... CLICK HERE for the complete article



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Bonds & Interest Rates

Will Trump Fire Yellen or Vice Versa

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Posted by Michael Pento - Pento Portfolio Strategies

on Friday, 07 July 2017 07:51

trump-yellenCitigroup’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.

But that's not what’s happening. Ms. Yellen and Co. are threatening at least one more rate hike and to start selling what will end up to be around $2 trillion worth of MBS and Treasuries before the end of the year--starting at $10 billion each month and slowly growing to a maximum of $60 billion per month.

But why is the Fed suddenly in such a rush to normalize interest rates and its balance sheet? Perhaps it is because Ms. Yellen wants to fire Trump before she hears his favorite mantra, “you’re fired,” when her term expires in early 2018. It isn’t a coincidence that these Keynesian liberals at the Fed started to ignore the weak data concurrently with the election of the new President.



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Bonds & Interest Rates

The Pin To Pop This Mother Of All Bubbles?

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Posted by Chris Martenson - Peak Prosperity

on Friday, 23 June 2017 07:04

bubble-big-pin.jpegA worsening shortfall in new credit

Global macro economic data has been weak for many years, but there’s now a very real chance of a world-wide recession happening in 2017.

Why? A dramatic and worsening shortfall in new credit creation. 

The world’s major central banks have, again, done the world an enormous disservice.  Instead of admitting that maybe/perhaps/possibly the practice of issuing debt at more than twice the rate of underlying economic growth was a very bad idea over the past several decades, they instead doubled down and created an even larger debt monster to be dealt with.

The resulting global asset price bubble -- or, more accurately, set of nested and incestuously intertwined bubbles -- can collectively be called the Mother Of All Bubbles (MOAB). None has ever been larger in history. 

---continue reading HERE



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Bonds & Interest Rates

Treasury Yields: A Long-Term Perspective

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Posted by Jill Mislinski - Advisor Perspectives

on Tuesday, 20 June 2017 06:25

Let's have a look at a long-term perspective on Treasury yields as of Friday's close. The chart below shows the 10-Year Constant Maturity yield since 1962 along with the Federal Funds Rate (FFR) and inflation. The range has been astonishing. The stagflation that set in after the 1973 Oil Embargo was finally ended after Paul Volcker raised the FFR to 20.06%.

Last year was a remarkable one for yields. The 10-year note hit its historic closing low of 1.37% in July and then rose 123 BPs to its 2016 closing high of 2.60% in mid-December. The yield on the 10-year note to date has dropped to 2.16% as of Friday's close.

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....read more HERE

 



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