Weekly Report: what happened at UST last week (0415-0419)?

Rate Volatility's Market Implications

Higher-For-Longer Risk For Rates Drives Up Treasury Yields

Pre-FOMC: A Different Type Of Taper

Weekly Report: what happened at UST last week (0408-0412)?

2 Things About The PPI: March Seasonal Adjustments Were Huge, And 3-Month Rates All Jumped

Producer Price Index jumped by 6.2% annualized in March from February. The three-month rate of the PPI jumped 7.8% in March, the highest since June 2022. Seasonal adjustments in March were much larger than in the years before the pandemic. The PPI is seasonally adjusted, and all three- month rates all jumped in March.

The Federal Reserve Needs To Raise Interest Rates 0.25%

The Federal Reserve needs to raise their Fed funds target rate by 0.25% at their May 1 meeting. The Fed's 2% inflation target is considered optimal for economic growth and stability. Current interest rates are not historically high, and there is no need for a rate cut. Inflation figures are trending up and employment numbers are strong.

Inflation Is Inevitable, You Must Act Now

Inflation is inevitable in the long term, and investors should prepare their portfolios for this environment. The current economic situation shares similarities with the period spanning from the Roaring Twenties to World War II. Gold, oil, and Bitcoin are expected to be good inflation hedges.

Weekly Report: what happened at UST last week (0401-0405)?

Nothing In The Jobs Report Indicates The Fed Should Cut Rates: Labor Market Plugging Along Just Fine Despite 5.5% Rates

Nothing In The Jobs Report Indicates The Fed Should Cut Rates: Labor Market Plugging Along Just Fine Despite 5.5% Rates. Average hourly earnings rose in March at an annualized rate of 4.3%. The labor force rose by 469,000 in March to 167.9 million. In March, 303,000 payroll jobs were created - better than expected.

Yes, The Labor Market Is Still Not Tight

This month's labor report showed one of the sharpest slowdowns of recent years with the rate of change slowing from 4.6% to 4.2%. The labor market is still not tight enough to cause inflation. The Fed has room to wait on rate cuts.

Here's Why 5% Is Again A Risk For The U.S. 10yr

ING: We think the Fed peaked in July 2023. The 10yr yield has not been trading in a manner consistent with prior peaks. 5% is a risk for the US 10yr. In the current cycle, the Fed hit its cycle high of 5% in October 2023, three months after the funds rate peak.

Now Is Not The Time To Buy Bonds

Now is not the time to be piling into long-duration bonds. Growth and inflation are not supportive of bonds. The fundamental outlook for bonds remains questionable at best. The leading indicators of growth and inflation for 2024 suggest both dynamics could put upside pressure on yields. The economic growth impulse appears a headwind for bonds.

Moderate Growth And Disinflation Still Alive And Well

Low and declining inflation and moderate-to-strong growth can coexist indefinitely if the Fed is acting correctly. Inflation pressures remain quite subdued; disinflation is still in place. The economy continues to grow at a non-spectacular pace. The number of firms that report paying higher prices continues to decline.

New Questions Emerge On Prospects For A June Rate Cut

Forecasts that the Federal Reserve will start cutting interest rates in June took another hit after March manufacturing survey data for March. Markets are still pricing in moderate odds that easing will start at the end of the second quarter. But recent economic data continues to suggest that a growth bias prevails for the US.

Q1 2024 Total Return Gov/Credit Review

After a sharp decline in yield during Q4 2023, Treasury yields rose during Q1 2024. We experienced significant increases in 10- and 30-year Treasuries. Spreads on investment-grade corporates and taxable munis continued to grind lower as Treasury rates rose. We will continue to take a conservative approach to credit.

Subtle Signs Of A Cooling Jobs U.S. Market Will Aid The Fed's Inflation Fight

Dawn Of A New Regime: Implications For Fixed Income

Mounting pressures from macro megaforces point toward higher structural inflation and lower real GDP growth in the years ahead. We think higher inflation and slower economic growth will reverberate across the global fixed-income markets. Three powerful forces: deglobalization, demographics and climate change.

Weekly Report: what happened at UST last week (0325-0329)?

Money Supply Dips For First Time Since November