Tag Archives: US treasury

Jun 18, 2020

Not that wrong

Stock markets continue to rally globally, ascending a wall of poor economic data and significant negative sentiment.  Concern that current price levels are unjustifiable is widespread: 78% of respondents to the most recent Bank of America Global Fund Manager Survey believe that the market is overpriced, the highest level since the survey began in 1998. …

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May 14, 2019

MMT or Why Budget Deficits are Ok If They Don’t Grow Too Fast

Economics used to be Political Economy. Today politics in encouraging economics to look at different ideas such as Modern Monetary Theory. MMT argues that a country which borrows in its own currency will never default: as long as the US sells bonds denominated in US dollars, it won’t matter how big the federal budget deficit…

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May 16, 2018

Inflation: Benign for Now

Having broken through 2% in January 2018, the 10-year U.S. Treasury breakeven rate (as measured by the difference between the S&P U.S. Treasury Bond Current 10-Year Index and the S&P U.S. TIPS 10 Year Index) has continued to increase, reaching a YTD high of 2.18% on April 23, 2018. As of May 14, 2018, the…

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Mar 1, 2018

Laddered Protection

Continuing the theme of rising interest rates and following up from my last blog, “With all the News of Higher Interest Rates, Don’t Forget About Floating-Rate Debt,” bond laddering is a strategy that provides increased income and the ability to adjust the stream of income in a rising-interest-rate environment. The approach is to invest in…

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Feb 14, 2018

With all the News of Higher Interest Rates, Don’t Forget About Floating-Rate Debt

The story line for a number of years now has been the “search for yield” and how the recent low-interest-rate environment has been forcing investors down in credit or out the maturity curve in an effort to maintain income though adding risk. Now that interest rates have begun reversing the low-rate environment, fixed-coupon securities may…

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Jan 10, 2018

Turning Point in Bond Yields

The ten year Treasury note closed with a yield over 2.5% this week, sparking talk that interest rates may have bottomed. The first chart shows the yield on the 10 year treasury going all the way back to 1953.  As seen there, the bottom in July 2016 at 1.5%. Last March the yield was 2.5%,…

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Jul 12, 2017

U.S. Yield Curve Moved by Europe

The U.S. Treasury yield curve, as represented by the S&P U.S. Treasury Bond Current Indices, ended June 14, 2017, tighter (lower in yield) than the previous day.  The importance of June 14 is that it was the day on which the U.S. Federal Reserve raised the target rate by 25 bps, from 1% to 1.25%.  The following…

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Jun 1, 2017

Canadian Update

Canada’s economy has been accelerating due to increased consumer spending and a rebound in business investment.  Consumer spending driven by vehicle purchases and real estate investment has lifted the economy, along with improved business investment.  The economy and its growth trend now appear to be on a more secure path.  As of May 31, 2017,…

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Jan 1, 2017

Rieger Report: Municipal bonds in 2017?

A look back may be a telling way to view municipal bonds in 2017. The modest total return of the S&P Municipal Bond Index (0.77%) in 2016 masked an atypical year of volatility for the normally staid market place.  During the year, municipal bonds enjoyed being one of the ‘risk off’ asset classes and as low…

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Jun 20, 2016

S&P U.S. High Quality Preferred Stock Index: A Venn of an Index

Similar to the Venn diagram in which the overlapping section of circles is the focus, the S&P U.S. High Quality Preferred Stock Index is designed to measure preferred securities that are constituents of both the fixed-rate and investment-grade preferred stock indices. Exhibit 1: S&P U.S. Preferred Stock Indices Hierarchy The weight of cumulative preferred stocks…

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