Tuesday, October 22, 2019
In a world of ultra-low interest rates, it seems every investor is searching for yield. Of course, that should come as no surprise when 10-year notes are yielding something like 1.6%. A yield like that is certainly not going to fund most people’s retirement! Given the yield of government bonds, it’s also no wonder that […]
Recently I was contemplating the spill-over effects of the continuing trade war and got to thinking about oil. I figured it was time to send a (very) informal “thank you” letter to China’s President Xi. Here’s the initial draft. Dear President Xi, I wanted to drop you a real quick line to say, “gracias, merci […]
Why are investors so fixated on interest rates? If you follow the financial markets regularly, you’ll notice how laser-focused the investment community is on what the Federal Reserve is doing, how bond markets react, and what it all means for interest rates. But why are interest rates so important? What does a change of a […]
If the markets weren’t so focused on the trade war with China, then most of the focus would likely be on interest rates. Of course, the trade war has an impact on interest rates, although it’s not a cut and dry connection. In a nutshell, tariffs could hurt domestic economic numbers, which could certainly factor […]
Just a few months ago, bond “experts” were all over the financial news networks predicting the yield curve would soon invert. An inverted curve, where short-term rates are higher than long-term rates, is a reliable indicator that the economy will go to negative growth – a recession. At that time the stock market was setting […]
Later this week the Federal Reserve Board is expected to announce another interest rate hike. The Fed will likely its target short term interest rate by 0.25% to a range of 2.25% to 2.5%. The new Fed Funds rate is up from 0.50% two years ago. While many investor fears concerning higher interest rates and […]
Despite all the headlines about the upcoming trade summit with China, it’s interest rate expectations that are more likely driving the financial markets. Yes, a trade war with China is bad for both countries (and the global economy) and a resolution would certainly be good news for stocks. However, from a global perspective, interest rate […]
Are bond funds a safe haven if the stock market crashes? With interest rates about to rise, is it a good time to invest in a bond fund? These are questions investors may be asking themselves as the stock market may be peaking and the Fed keeps jacking up interest rates. If you are fearful […]
Next Tuesday and Wednesday, the Federal Reserve’s Open Market Committee will meet to discuss U.S. interest rates. Alas, if you’re looking for drama and anticipation, try the current Stanley Cup Final instead. The federal funds futures market has priced in a 90% chance of a rate hike. It would follow a 0.25% rate bump to […]
This week, we get the next installment of the FOMC meeting – the big Fed meeting where they decide what to do with interest rates. The meetings are a bit more interesting these days since rates are going up and some sort of definitive actions tends to take place. Keep in mind, we had several […]
