The Treasury yield curve continued to invert as short rates climbed higher and long rates fell. The 1-Year climbed to 3.14%, the 2-Year rose to 3.10% while the 7, 10, 20 and 30-Year Treasury yields all fell (see table below). The Treasury market is telling us that it expects a near-term recession by way of … Continue reading Yield Curve Inversion Implies Near-Term Risk
Tag: yield curve
10-year Treasury yields sit around 2.72% and will climb higher as the Fed: a.) lifts the Fed Funds Rate and, b.) trims its balance sheet (i.e. quantitative tightening "QT"). There is no scenario in which the Fed executes QT only to have Treasury yields move lower. It is simply a question of supply and demand. … Continue reading Treasury Yields Will Only Move In One Direction
Speaking of a flattening of the yield curve, spreads between the 5 and 30-year Treasuries have not been this narrow since June 2007 (see chart below). Reach us at email@example.com if you would like the Excel data behind the chart. Source: Treasury.gov; TEK2day.com. Click chart to expand.
Insurance company CIOs continue to use Alternative Assets to increase yield in this ultra-low interest rate environment. KKR Asset Management's Insurance CIO survey found similar results (chart below) to our recent TEK2day Spotlight report on the insurance industry which may be accessed HERE. We expect that the heavy use of Alternative Assets in the pursuit … Continue reading Leveraging Alternative Assets To Increase Yield
We reviewed the 592 page Biden COVID Relief / Stimulus bill which recently became law. Our breakdown includes the nine primary spend categories and related subcategories as presented in the bill. Needless to say this is a massive debt-funded fiscal spending program at a time when Debt to GDP is at a record level. The … Continue reading A Breakdown of Biden’s Debt-Funded COVID Relief Program
We have said it on our TEK2day Podcast and in conversations with some of you that the Fed's next move is to accelerate its QE effort to control long bond yields. This may occur as soon as this month. An interest rate hike is not coming this year in our view. There is far too … Continue reading The Fed’s Next Move Is To Ramp QE, Not Raise Rates.
We recently wrote that weening the equity market and Americans off of easy money will be difficult. We expect The Federal Reserve to march in lockstep with Congress and Treasury rather than act as the independent check on Government the Fed was meant to be. Thus, we expect monetary policy to remain loose for the … Continue reading The Fed’s Evolution From Independent Agency to Treasury Subsidiary