Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, December 13, 2024
Fed Balance Sheet Continues To Decline / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
FED BALANCE SHEET
Below is a chart posted and updated regularly by the Federal Reserve Bank of St. Louis…
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Thursday, September 12, 2024
Global Debt Bubble / Interest-Rates / Global Debt Crisis
By: Nadeem_Walayat
The global debt bubble that just keeps on inflating. And what does all this debt do? Debase currency and Inflate asset prices.
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Friday, August 30, 2024
The Post-2020 History of the 10-2 US Treasury Yield Curve / Interest-Rates / US Interest Rates
By: Gary_Tanashian
The 10yr-2yr Yield Curve is poised to un-invert under disinflationary, possibly coming deflationary pressure
We know the story. A disgusting virus spread across the world…
covid, yield curve
…terrorizing society into social and economic lockdown, causing crude oil to go to zero and many markets to begin a crash. The Fed sprang into action with Zero Interest Rate Policy (ZIRP), QE, MMT and whatever other TMM (total market manipulation) it could think of in order to create the inflationary pathway out of the disaster.
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Friday, June 07, 2024
The Fed Leads and the Market Follows? It's a Big Fat MYTH / Interest-Rates / US Interest Rates
By: EWI
By Murray Gunn | Head of Global Research, Elliott Wave International
We help investors by analyzing what really drives the markets. Along the way, we often uncover a market myth, something most investors believe moves the markets, but really doesn't.
I want to show you one of the biggest market myths in existence. It will help you understand what the Fed can and cannot do.
The one thing the Federal Reserve can do is control the money supply. The physical printing of dollars, or the digital creation of reserves, is in its gift. The natural state of affairs is for the money supply to grow at a rate of around 5% per annum.
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Friday, May 24, 2024
Why US Interest Rates are a Nothing Burger / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
All eyes today will be on the Fed and it's interest rate decision, weren't we supposed be having a cut in March? That's gone! Kicked down the road. So no rate cut today or at the next meeting nor likely in June. And each time the Fed holds the MSM clowns cry stocks must fall due to failure for rate cuts to materialise all whilst the bull market continues to relentlessly grind higher.
Everybody is obsessed with when will the rates be cut without understanding why rates should be cut!
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Thursday, May 09, 2024
The Federal Reserve Is Broke! / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
The Federal Reserve is losing billions of dollars. As financial journalist and market analyst Jim Grant put it during a recent interview on Fox Business, the Fed is actually broke.
But most people don't seem concerned about the central bank's financial condition. They are more concerned about what Donald Trump may do to the Fed if he wins the election.
Monday, April 29, 2024
The Federal Reserve's $34.5 Trillion Problem / Interest-Rates / US Debt
By: MoneyMetals
The Federal Reserve has a $34.5 trillion problem.
And the problem is growing.
Yes, I’m talking about the national debt.
How is the debt the Fed’s problem?
It hamstrings the Fed’s ability to fight price inflation.
Sunday, April 07, 2024
The Fed is becoming increasingly divided on interest rates / Interest-Rates / US Interest Rates
By: Submissions
Powell reaffirms multiple rate cuts are on the table, but his peers thinks we’ll be lucky to get one this year
The Fed's officials can’t seem to get their stories straight.
On April 3, Fed Chair Jerome Powell reaffirmed his expectations for multiple rate cuts this year, shrugging off the recent uptick in inflation.
Sunday, March 31, 2024
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Everybody wants to know when the Federal Reserve is going to declare victory over price inflation and begin loosening monetary policy.
The real question is - when are they going to make monetary policy tight again?
Because despite all the worry about high interest rates, monetary policy remains relatively loose.
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Monday, March 25, 2024
The Federal Reserve Didn't Do Anything But It Had Plenty to Say / Interest-Rates / US Interest Rates
By: MoneyMetals
The Federal Reserve didn’t do anything at its March Federal Open Market Committee (FOMC) meeting, but Jerome Powell & Company had plenty to say.
The Fed’s dovish rhetoric sent a wave of relief through the markets and drove stocks to yet another all-time high.
People would probably be wise to remember that saying isn’t doing.
Monday, March 11, 2024
Fed’s Next Intertest Rate Move might not align with popular consensus / Interest-Rates / US Interest Rates
By: Richard_Mills
The Fed’s preferred measure of inflation is core PCE, which stands for Personal Consumption Expenditures index. This inflation gauge, published monthly by the Bureau of Economic Analysis (BEA), doesn’t include food and energy, because prices for these two categories tend to be volatile.
When the latest PCE numbers came out on Feb. 29, they showed January headline PCE was 2.4%, year on year, while core PCE was 2.8%.
Remember, the Fed’s targeted inflation rate is 2%. Inflation needs to be falling to somewhere close to 2%, for the Fed to consider lowering interest rates, having raised them 11 times since spring 2022.
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Monday, March 11, 2024
Two Reasons The Fed Manipulates Interest Rates / Interest-Rates / US Interest Rates
By: Kelsey_Williams
There are two reasons the Fed manipulates interest rates. Before we talk about those reasons, though,it is important to understand that the Fed does not actually control interest rates. Interest rates are set in the bond market. Buyers and sellers (traders) bid for and offer bonds for sale. When a buyer and seller agree on a price, the trade is finalized. The specific price, in conjunction with the face value of the bond (always $1000) and the stated coupon rate attached to the bond (and the length of time until the bond matures for yield to maturity) factor into the formula which determines the current yield, or what might be called the bond’s current interest rate.
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Saturday, March 09, 2024
The Bond Trade and Interest Rates / Interest-Rates / US Bonds
By: Nadeem_Walayat
An opportunist trade to capitalise on the bond market blood bath of 2023,, objective for about a 50% return over 2 years with my original analysis timed to coincide with the bond market bottom - 7th Aug 2023 https://www.patreon.com/posts/inflation-bond-87342150
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Friday, March 01, 2024
US Interest Rates - When WIll the Fed Pivot / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
The current Fed Funds rate is 5.25% with he market expectations for the cuts to commence March 2023, though the market has been wrong for the whole of 2023 when Fed rate cuts were always seen as starting some 6 months into the future! In reality it does not matter when the Fed cuts rates because the Fed FOLLOWS the market rates not sets them. And the market rates as evidenced by bond yields has been falling for the past few months.
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Monday, February 05, 2024
US Exponential Budget Deficit / Interest-Rates / US Debt
By: Nadeem_Walayat
The US Congress Budget Office report projects the US deficit as a percentage of GDP being on an explosive trend trajectory which is as a function of the US government borrowing money to spend on consumption resulting in an ever interest payments and debt mountain. Folks we are looking at an out of control debt spiral, as interest on debt continues to result in the printing of even more new debt.
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Sunday, February 04, 2024
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates / Interest-Rates / US Interest Rates
By: Richard_Mills
The probability of interest rate cuts has many market participants pondering whether 2024 will bring a bull market for precious metals.
Gold has held up quite well despite the Fed’s tightening cycle, gaining 13% in 2023.
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Friday, December 01, 2023
The Bond Trade / Interest-Rates / US Bonds
By: Nadeem_Walayat
The Bond Markets look like they have bottomed.
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Saturday, November 18, 2023
Biden Bizarrely Brags About Lower Budget Deficits as US Federal Debt Skyrockets / Interest-Rates / US Debt
By: MoneyMetals
The more things change in Washington, the more they stay the same.
Under the new leadership of House Speaker Mike Johnson, Congress passed a stopgap funding bill on Tuesday to once again avert a government shutdown. It was quickly approved by the Senate on Wednesday, then signed into law by President Joe Biden.
Like the last one, this latest bipartisan budget scheme includes no spending cuts. So once again, deficit hawks are left feeling betrayed – not to mention alarmed at the country’s worsening fiscal trajectory.
Friday, November 03, 2023
US Bond Market Chaos to Increase by March 2024 / Interest-Rates / US Bonds
By: Michael_Pento
The major issue with the bond market right now is the overwhelming amount of bond issuance combined with the notable absence of the usual buyers. In other words, the illiquidity is already causing U.S. sovereign debt to trade like a microcap penny stock. This dysfunctional trading environment should become exponentially worse by the end of Q1 2024.The U.S. national debt is now $33.5T, and the interest on that debt is $712b so far this year. That interest expense is set to double over the next few years as our debt is rolling over at much higher interest rates. Interest payments equal to 17% of all Federal revenue and should easily jump to 35% of all income very soon. The deficits will be much greater when the recession arrives, as the automatic economic stabilizers kick in, just as revenue also collapses. Entitlements and debt service payments will equal 100% of all revenue by 2040 at the very latest. At that point, there will be no room for any other government spending. Our bond market is fracturing, and it is becoming an existential crisis for our financial system. What else would you expect when the nation’s annual deficit is 45% of our revenue, and that is adding on each year to the national debt, which is an incredible 771% of annual federal income!
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Saturday, October 28, 2023
The Bond Trade / Interest-Rates / US Bonds
By: Nadeem_Walayat
As expected the four bond funds have been gravitating towards bear market lows and thus offering an opp to accumulate, I am now approx 55% invested.
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