The Quarterly Refunding Announcement sparked a sizable decline in Treasury yields, but the rally may not last. The announcement was well received because it guided towards just one more increase in coupon sizes, a compositional skew towards medium term tenors, and a potential for further increases in the share of bills. These developments were positive
Estimated annualized interest payments on the U.S. government debt pile climbed past $1 trillion at the end of last month. That amount has doubled in the past 19 months, and is equivalent to 15.9% of the entire Federal budget for fiscal year 2022.
Moody’s Investors Service on Friday lowered its ratings outlook on the United States’ government to negative from stable, pointing to rising risks to the nation’s fiscal strength. The ratings agency has affirmed the long-term issuer and senior unsecured ratings of the U.S. at Aaa. “In the context of higher interest rates, without effective fiscal policy
An unlikely aberration has taken place in global bond markets for the first time on record: yields on emerging-market bonds in local currencies have fallen below US Treasuries. A selloff in U.S. government debt since May has sent borrowing costs for the world’s largest economy soaring to an average yield of 5%. But local-currency sovereign
Investors turned the most bullish on bonds since the global financial crisis on “big conviction” that rates will move lower in 2024, according to the latest Bank of America Corp. fund manager survey. The monthly survey showed investors were dumping cash to hold the biggest overweight position in bonds since 2009. BofA’s Michael Hartnett said
You can watch and listen on Youtube via the timestamps below: 00:00 Introduction 24:37 Powell Is No Volcker – Luke Gromen 28:18 The Fed Has Broken The U.S. Energy Market 38:35 Will Demand Destruction Keep Oil Prices From Spiraling Out Of Control (Greater than $120)? 42:51 How Long Till The Fed Intervenes? 47:49 The Banking
I graduated from Yale University’s PhD programme in economics six years after Janet Yellen did so in 1971. We both studied under Nobel laureate Professor James Tobin. Nevertheless, she is a liberal and I am a conservative when it comes to economic policymaking. I coined the phrase “bond vigilantes” four decades ago. Now, as the
Ed Yardeni’s op-ed in the FT is an important signpost: Credible, mainstream analysts are starting to see the US Treasury feedback loop/debt spiral, and the mainstream financial media is starting to report on it. However, they do not appear to realize two critical things yet: With all due respect to Yardeni, things are WAY different
Unhedged has written several times about the rising term premium, an important, and concerning, attribute of the recent sell-off in long bonds. The term premium is the extra dollop of yield investors get for holding long-dated Treasuries, as compensation for taking on interest rate risk. Think of it as the difference in yield between a