An economically driven Treasury sell-off
There are many vague theories being discussed as to why Treasury yields have risen so much since January, but it isn’t that complicated. The Treasury market’s primary driver is the outlook for growth and inflation and the sell-off (rates higher) since January can be fully…
This is just a yield backup, not a new paradigm
I wrote in early January that Treasury yields would rise because economic data had turned upwards from the universally bad data released in November. As hot economic data continued in January and February, Treasury yields have risen about half of what they fell from last…
The bond market has gotten ahead of the economic data
Happy New Year! Economic data released in November (representing October) was uniformly negative and a major factor in how dovish the Fed was at their most recent 12/13 meeting. In the press conference, Jerome Powell said, “Recent indicators suggest that growth of economic activity has…
Things are changing
Things are changing: the Beige Book, waning Fed jawbone, and the first Fed cut The Atlanta Federal Reserve prepares what they call the “Beige Book” to summarize anecdotal economic activity in the 12 geographic Federal Reserve districts two weeks before each Fed meeting. The most…
Special Report: It Won’t Be A Repeat of the 1970’s
Economic conditions now are quite different from the 1970’s and still disinflationary. PDFOn Advisor Perspectives
Wars and Treasury Bonds
With the Israel-Hamas conflict escalating along with the ongoing Russian-Ukraine war, there is concern of wider war. War is inflationary, but Treasury yields don’t necessarily rise during them because there are often bigger forces at play such as the business cycle, secular trends in inflation,…
Special Report: Views from the Top
A collection of newspaper quotes over 75 years showing that the Treasury bond narrative now is typical to ones near past cyclical interest rate peaks. Fiscal fears are used when no other explanation suffices. PDF
Economic data has caused yields to rise
With the speed and magnitude that Treasury yields have risen recently, many commentators have suggested it is due to a new paradigm of high interest rates based on structural inflation, stagflation, a higher neutral real rate, or fiscal concerns. But recent economic data suggests that…
Powell’s Jackson Hole Speech Thoughts
Jerome Powell will give a closely-watched speech tomorrow (Friday, 8/25) at the Federal Reserve Bank of Kansas City’s annual Economic Policy Symposium in Jackson Hole, Wyoming at 10:05am ET. Historically, the Fed Chairman’s speech has often hinted at inflection points in policy, but I don’t…