Tag Archives: FOMC

Leveraged Loans in a Rising Rate Environment – Carry Factor Dominates

Since the end of 2015, the U.S. Federal Reserve has raised the policy rate eight times to currently 2.0%-2.25%. The minutes of the recent September FOMC meeting reiterated the committee’s positive growth outlook and confidence on 2% inflation. Market players continued to catch up on pricing future Fed hikes. Currently the market is implying approximately Read more […]

Asian Fixed Income: Did the FOMC Affect Asian Sovereign Bonds?

The U.S. Federal Reserve recently announced a rate hike of 0.25%, while indicating more rate hikes are likely in 2017.  As of Dec. 21, 2016, the S&P U.S. Treasury Bond Index had lost 0.58% for the month, bringing its total return to 0.06% YTD, while its yield widened 27 bps to 1.75% in the same Read more […]

Expect more starting and stopping at the Fed on Interest rates.

Given the FOMC minutes released yesterday we expect to see two rate increases in 2016. The next move is likely to be in June, not at the April 27th meeting. Some analysts blame disagreements within the Fed for what they see as inconsistent and changing policy.  While it is difficult to anticipate short term market Read more […]

Countdown to Tomorrow

Tomorrow the Federal Reserve is expected to raise its benchmark Federal Funds rate by 25 basis points  — the first increase in seven years.   This increase, assuming that it comes, must surely rank among the Fed’s most advertised and anticipated moves ever, and Wall Street trading desks are ramping up in expectation of heightened trading volumes.   We have Read more […]

The FOMC and GDP: Not As Confusing As It Looks

The statement issued by the FOMC, the Fed’s policy making unit, following its meeting on Wednesday sent a clear message that the central bank expects to raise interest rates at its next sit-down in December.  Thursday morning at 8:30 AM the Bureau of Economic Analysis published the advance estimate of third quarter GDP showing a Read more […]

Speculating About the Fed’s Timing

Little new data, lots of chatter from Wall Street and no clear signals about what the Fed might do at next week’s FOMC meeting. The announcement, either no change or a rate increase, is expected on Thursday afternoon September 17th around 2 PM Washington DC time. Those looking for some hint of what this might Read more […]

The Fed Puzzle Continues

Among analysts and Fed watchers, no matter what they expected from the Fed, they were all confident that this morning’s August Employment report would reveal the future.  No luck. If anything, the report had something, but not enough, for everyone. The increase in payrolls was 173,000, far below the 220,000 expected; the previous two months Read more […]

Next Week’s FOMC Decision A Watershed Event? High Yield Doesn’t Seem To Think So.

Unlike Treasuries and investment grade corporates, the high yield market as measured by the S&P U.S. Issued High Yield Corporate Bond Index touch a low point for yield earlier in the month at a 5.87% on October 6th.  This market was in the process of selling off and had a yield of 6.51% on October Read more […]

Sell Just Before, Not After, the FOMC Meets

A recent academic paper (link here, full citation below) demonstrates that day-to-day stock market returns follow a regular bi-weekly cycle tied to the schedule of FOMC meetings, the Fed’s policy unit. A rolling five day return calculated as the excess return of stocks over T-bills peaks on the day the FOMC meets and then every Read more […]

A Renewed Interest in High Yield Bonds

High Yield Bond Market – Outlook has changed to the positive, away from the recent stories of overvaluation and fund withdrawals. The S&P U.S. Issued High Yield Corporate Bond Index returned 1% last week and a 0.43% the week before to recover the loss incurred the last week of July (-1.38%).  Year-to-date the index is Read more […]