Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, September 24, 2011
Operation Twist Paves the Way for QE III / Interest-Rates / Quantitative Easing
By: Peter_Schiff
Earlier this week the Federal Reserve ignited a firestorm in the global markets by admitting that the U.S. economy is facing downside risks. Although it continues to sugar coat the unpleasant reality, never has such a stunningly obvious statement resulted is so much turmoil.
Friday, September 23, 2011
U.S. Treasury 10-year Note Yield Hits Record Low, Will it Last? / Interest-Rates / US Bonds
By: Asha_Bangalore
The 10-year Treasury note yield was trading at 1.73% today, record low for this security. The Fed’s Operation Twist aims to bring down long rates such that it will spur economic activity by rendering a reduction in cost of home mortgages and new ventures of entrepreneurs and making replacement cost of machines and equipment less expensive. The 10-year Treasury note closed at 1.88% on September 21 after the Fed announced the launching of Operation Twist. Thus, the Fed appears to have succeeded, but the rally in the U.S Treasury market today is largely a flight to safety. The durability of this low reading is tied to the persistence of a weak global economy; incoming data point to slowing economic conditions in several major economies of the world.
Thursday, September 22, 2011
Hello Global Economic Recession 2011 / Interest-Rates / Double Dip Recession
By: Mike_Shedlock
If you did not know it before, you should know it now: The global economy is in recession.
Thursday, September 22, 2011
Federal Reserve Board: Operation Twist, "Significant Downside Risk"' to the Economy / Interest-Rates / US Debt
By: Jesse
Nothing unexpected in today's Fed release. It was Operation Twist, with about $400 billion in Treasuries being rolled into the longer end of the curve from 6 to 30 years.
The Fed will be rolling over its Agency debt as it matured.
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Thursday, September 22, 2011
Greek Debt Crisis in Perspective / Interest-Rates / Global Debt Crisis
By: Andrew_Butter
The only solution for the European debt crisis is if the ECB prints a trillion Euros and does a “Fed” by buying up dodgy bonds, and then puts them in cold storage; if it doesn’t do that, soon, then something nasty is going to happen.
The negotiations as we speak are to find a piddling $8 billion to pay the salaries of the Greek public sector in October; it’s that close to the wall. Meanwhile the European political process is paralysed and the ECB does not have the power to do anything; Europe runs on consensus and rules, when the consensus disappears and the rules get broken, what’s left? Don’t expect a TARP or a TALF.
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Thursday, September 22, 2011
FOMC Engages in Operation Twist, Another Unconventional Step / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The Fed left the federal funds rate unchanged, as expected, at 0.0-0.25%. The much awaited action called “Operation Twist” was part of the policy announcement. It was not an unanimous vote, three Fed Presidents -- Richard Fisher of Dallas, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia – who are concerned about inflation dissented. These three Fed officials opposed the FOMC's August 9, 2011, decision that included an assurance of holding short-term interest rates near zero until mid-2013.
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Wednesday, September 21, 2011
Fed's Operation Twist a "Visual" Success, 30-Year Treasury Bond Yield Drops 17 Basis Points / Interest-Rates / US Bonds
By: Mike_Shedlock
Curve Watchers Analysis is following the Operation Twist Story.
Wednesday, September 21, 2011
QE3: What are The Implications of Critical Warnings To Bernanke? / Interest-Rates / Quantitative Easing
By: DK_Matai
Top Republican lawmakers in both chambers of Congress have warned Federal Reserve Chairman Ben Bernanke to refrain from further extraordinary intervention or additional quantitative easing after today's meeting of the Federal Open Market Committee (FOMC). Questioning the efficacy of the first two rounds of monetary easing:
Wednesday, September 21, 2011
Has the FED Lost Control of Long End of the Yield Curve? We think so! / Interest-Rates / US Bonds
By: Capital3X
There is nothing more scary for the FED than to look at the 30 year yield sticky and stubborn. The only reason why FED would need to do a QE is to take control of 30 year yield. The short end is near zero and there is very little that can be done at this end. The 20/30 year yield now is where the absolute need if for a QE. The problem now is not whether the QE is of few billions or more. The FED has no option but to do: QE ad infinitum.
Wednesday, September 21, 2011
Today's FOMC Meeting Will Prove That Team Bernanke is Out of Ideas / Interest-Rates / US Interest Rates
By: Money_Morning
Kerri Shannon writes:
If you're handicapping the U.S. Federal Reserve's two-day Federal Open Market Committee (FOMC) meeting that concludes today (Wednesday), you can make the following two predictions - and you'll almost certainly be right:
Wednesday, September 21, 2011
Europe's Botox Bailouts on a Corpse / Interest-Rates / Credit Crisis 2011
By: Gary_North
"It's a bit like botox. It looks good for a while but will eventually start to sag again." ~ Katherine Garrett-Cox
Mrs. Cox is the chief executive of England's Alliance Trust investment fund. She has dismissed Europe's attempts to solve its debt crisis as "economic cosmetic surgery", warning there is "more pain" to come over the next few months. So we read in the London Telegraph.
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Wednesday, September 21, 2011
Central Banks Can Increase the Money Supply, Even If Banks Do Not Lend / Interest-Rates / Quantitative Easing
By: Thorsten_Polleit
I. The Relation between Bank Credit and Money Growth
In today's fiat-money world, money is mostly produced through bank lending. Whenever a commercial bank provides credit to, say, consumers, firms, and government entities, it issues new money, thereby increasing the economy's money stock.
Economists from the Austrian School of economics call this kind of money production "money creation out of thin air," as the increase in money through bank circulation credit doesn't require the existence of real savings.
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Wednesday, September 21, 2011
Fed Target Must be 5% Inflation / Interest-Rates / Inflation
By: Dr_Jeff_Lewis
The Federal Reserve may engage in what has been mocked by investors as “the twist,” a bond buying program intended to reduce long-term borrowing costs by soaking up long-dated Treasury issues. Of course, no matter the short-term goal, the real goal is to monetize the entirety of the US debt loads.
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Wednesday, September 21, 2011
Details to Note Prior to Fed Announcement on September 21 / Interest-Rates / US Interest Rates
By: Asha_Bangalore
It is widely anticipated that the Fed will announce new monetary policy support following the 2-day FOMC meeting on September 21, 2011. The Fed is expected to put in place “Operation Twist” to bring down rates at the long-end by purchasing long term U.S. Treasury securities to replace U.S. Treasury securities of short maturities in its portfolio. A large percentage of the Fed’s holdings are of 1-5 years maturity (see Chart 1).
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Tuesday, September 20, 2011
How Greece's Debt Issues Are Becoming a Global "Black Hole" / Interest-Rates / Global Debt Crisis
By: Money_Morning
Jon D. Markman writes:
The extremely volatile markets of late stem in part from news suggesting Greece's debt issues have made a default imminent - creating a global black hole that's sucking in a growing number of other economies with it.
Default fears intensified last Friday when European finance ministers announced they would delay a decision on whether or not Greece was eligible for its sixth tranche of bailout funds. Greece was scheduled to get the next $11 billion (8 billion euros) installment of its $152.6 billion (110 billion euros) aid package by the end of September, but now must wait at least until October.
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Monday, September 19, 2011
EU Bonds Rollover Debt with a Chinese Bailout / Interest-Rates / Global Debt Crisis
By: BATR
The financial press is inundated with the most ominous reports of an EU meltdown. The downturn in economic activity and little growth all comes down to the unsustainability in servicing the debt obligations. Sovereign countries bailouts only pile on even more debt. European banks are tied to a Euro dominated currency, while the political union is anything but unified. Any serious student of European history inescapably concludes that the perennial ambition to orchestrate a single patchwork of diverse cultures and interests into a pan European brotherhood is always doomed. A consensus fraternity based upon socialistic economics feeds the inevitable default. However, never fear the banksters will not suffer, as the globalists prepare to use their next crisis, to consolidate their grip of world dominance.
Sunday, September 18, 2011
The EU Debt Bubble: The Eurozone is Crumbling / Interest-Rates / Global Debt Crisis
By: Bob_Chapman
There are those who make excuses for the Federal Reserve and for the European Central Bank as well. Both are controlled by the banking community and are only interested in enriching themselves. These central banks take their orders who own or control these central banks. In the case of the ECNB and other sovereign banks, they are responsible for the terrible state of finances in the euro zone. Yes, we know the banks, and sovereign bans made the loans or brought the bonds, but the ECB has a direct connection into these institutions. The ECB president Jean-Claude Trichet is supposed to be a very bright banker. If that is so, why did this happen on his watch? We will tell you why. It is because he serves the bankers and not the people. He is just another front man for the Illuminists, just as Mr. Bernanke is. Mr. Trichet has only 2-months to go and then he can rejoin his banker friends.
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Sunday, September 18, 2011
How Does Europe's Debt Crisis Affect America? / Interest-Rates / Global Debt Crisis
By: Washingtons_Blog
What’s Happening In Europe … Does It Impact American Investors and Taxpayers?
All of Europe is now infected with the debt crisis, not just the periphery.
As CNBC notes, the multinational bailout of European banks won’t do much:
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Thursday, September 15, 2011
The Insidious Truth About Federal Reserve Policy / Interest-Rates / Central Banks
By: Money_Morning
Shah Gilani writes: So far, U.S. Federal Reserve policy has done nothing to help the economy. To the contrary, it's actually been quite destructive.
Yet Federal Reserve Chairman Ben S. Bernanke and his cohorts will likely expand upon their ineffective policies next week by announcing a new "Operation Twist."
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Thursday, September 15, 2011
U.S. Treasury Yields Plummet, Yet Demand is Lacking / Interest-Rates / US Bonds
By: Dr_Jeff_Lewis
As yields on Greek debt soared to a record 117% for one-year notes, the US Treasury announced a new auction of 3-year notes with an entirely different response.
While investors were busy watching Europe for any sign of life, a round of 3-year US Treasury debt escaped auction at a record low rate. According to the Treasury, the notes sold with a yield of .334% per year, meaning investors will walk away with little more than $10 in 2014 for every $1,000 invested.
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