yield curve

Housing History And Why The Yield Curve Got So Flat

By |2018-09-26T11:44:35+00:00September 26th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The global economy was in very rough shape in 1980. Caught in the spiral of the Great Inflation, there was practically nowhere to hide from ripping upheaval – beyond just the economic problems. Despite trying seemingly everything for an entire decade, nothing Economists came up with would rebalance the system. They kept saying they only [...]

‘Mispriced’ Bonds Are Everywhere

By |2018-08-30T16:27:35+00:00August 30th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The US yield curve isn’t the only one on the precipice. There are any number of them that are getting attention for all the wrong reasons. At least those rationalizations provided by mainstream Economists and the central bankers they parrot. As noted yesterday, the UST 2s10s is now the most requested data out of FRED. [...]

What’s On Peoples’ Minds? Not Inflation

By |2018-08-29T15:54:49+00:00August 29th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There are a few pretty good indications that inflation hysteria is long dead. Since this was one of the more extreme forms, it’s also relevant in parsing any shift from reflation back to deflation. There are any number of markets suggesting as much already. Still, this one really has to sting for sunny, confident Jerome [...]

The Price of Mispricing

By |2018-08-22T17:14:50+00:00August 22nd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC statement for the July-August 2018 policy meeting exceeded expectations once more. It’s difficult for the Committee to continually do this since the whole point of these things is to downplay all expectations. The goal is to make everything seem boring and uninteresting, if the Federal Reserve is doing its job. But they are [...]

Monthly Macro Monitor – August 2018

By |2018-08-15T13:36:41+00:00August 15th, 2018|Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Monthly Macro Monitor, Stocks|

The Q2 GDP report (+4.1% from the previous quarter, annualized) was heralded by the administration as a great achievement and certainly putting a 4 handle on quarter to quarter growth has been rare this cycle, if not unheard of (Q4 '09, Q4 '11, Q2 & Q3 '14). But looking at the GDP change year over [...]

The Smoke Thickens In China

By |2018-08-13T11:54:23+00:00August 13th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A major part of any yield curve is inflation expectations. Nominal growth particularly toward the longer end of curves sets the agenda for trading. But further out there are several confluences that may cause distortions. For Economists, these are conundrums. There are times, however, when curve dynamics remain pretty simple. These are not usually the [...]

Global Asset Allocation Update

By |2018-08-02T09:20:03+00:00August 1st, 2018|Alhambra Research, Bonds, Commodities, Currencies, Global Asset Allocation Update, Investing, Markets, Real Estate, Stocks|

The risk budget is unchanged again this month. For the moderate risk investor, the allocation between bonds and risk assets is evenly split. The only change to the portfolio is the one I wrote about last week, an exchange of TIP for SHY. Interest rates are on the rise again, the 10-year Treasury yield punching [...]

From Inflation Hysteria to Curve Crazy

By |2018-07-25T17:22:12+00:00July 25th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One soft indication of how far things have gone is Bloomberg. Six or eight months ago, its newsfeed was filled with uniformly apocalyptic hyperbole over inflation. The tight labor market, according to the Federal Reserve, was going to lead to a faster and farther rate trajectory. Sparked by quickening confidence in the short part of [...]