by John Luke Tyner | Feb 16, 2023 | Blog, Bonds
The blue line below is what the Fed is communicating per their DOT plot, on the terminal rate going to a range of 5.00% to 5.25%. The orange line is yesterday’s Fed Funds curve (following CPI). The market expectations for the Fed Funds rate is finally rising to the...
by John Luke Tyner | Feb 14, 2023 | Blog, Bonds
Another Stubborn CPI Report Likely Pressures Fed to Maintain Hikes The BLS’s latest inflation figures published this morning showed consumer prices rose 6.4% Y/Y in January, slightly higher than consensus. From a high-level view it was a fairly status quo...
by John Luke Tyner | Feb 2, 2023 | Blog, Bonds
As expected, the Fed hiked 25bps to the 4.5%-4.75% range, the eighth hike in a year. The markets experienced a pretty large rally following the FOMC meeting & presser. Stocks moved higher and yields lower as Powell continued to believe a soft landing was very...
by John Luke Tyner | Jan 18, 2023 | Blog, Bonds
The US government will change its CPI methodology beginning next month. Previously they had updated weights biennially using two years of expenditure data. So for last year, the 2019 and 2020 y/y %’s have been combined to form the “comp” against which y/y inflation...
by John Luke Tyner | Jan 13, 2023 | Blog, Bonds
CPI was right on the screws with expectations at -0.1% on headline and +0.3% core. But the details do paint a picture of lingering pressures at the core. Core services rose by 0.5%, up from the 0.4% in November. Owners’ equivalent rent rose by 0.8%, the highest...
by John Luke Tyner | Jan 5, 2023 | Blog, Bonds
Real Bad, Nominal Worse While the Fed might have been slow off the mark in fighting inflation in 2021, they marched double-time last year starting in March, taking the benchmark Fed Funds rate from about roughly 0% to 4.5%. This brought extreme pain to the...
