by John Luke Tyner | Jul 11, 2024 | Blog, Bonds
June CPI Reaction In response to the CPI print, markets are now pricing in an 8.5% chance of a July cut, a 94.5% of a September cut, and an 85.6% chance of at least 2 cuts by the end of the year. We think the market should not ignore the signal here. We’re...
by John Luke Tyner | Jun 27, 2024 | Blog, Bonds
Higher Neutral Rate Could Lead to Structurally Higher Interest Rates The graphic below shows pricing for forward contracts referencing the five-year interest rate in five years. This gives a proxy for the market’s view of where US rates might end up. ...
by John Luke Tyner | Jun 13, 2024 | Blog, Bonds
We see today’s print to be one of the first encouraging inflation prints for the Fed. The broader softness across components could point to a continuation of the slowing inflation data. May Core CPI came at 0.163% M/M (2% annualized), which was well below estimates....
by John Luke Tyner | May 23, 2024 | Blog, Bonds
TBAC Seeks New Funding Ideas The borrowing needs of the Treasury over the coming years are expected to drive an increase in issuance as the debt load compounds. The share of outstanding Treasuries held by its two largest investor types (foreign investors and...
by John Luke Tyner | May 9, 2024 | Blog, Bonds
Short Term Treasuries Offer Higher Income and Stability vs. Long Duration As interest rates have moved higher, the front end of the curve is offering a combination of high nominal income and interest rate protection. As the graphic shows, 2yr Treasury yields would...
by John Luke Tyner | May 2, 2024 | Blog, Bonds
As expected, the Fed kept its Funds rate range unchanged at a 5.25% – 5.50% level. Powell’s comments were less hawkish than feared, but there was disappointment expressed regarding the inflation news thus far in 2024. The Fed subtly walked back its last...
