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Yield Curve

Jan 08 2019

Yields Might Be Throwing A Curve

  • Jan 8, 2019

While the number of recession forecasts is on the rise, there’s a general reluctance among economists to project a downturn in the absence of a yield curve inversion.

Jan 08 2019

About That Great Jobs Report...

  • Jan 8, 2019

The December employment report temporarily eased fears of a severe U.S. slowdown. That’s a mystery to us.

Dec 07 2018

Deep-Six The “Threes-Fives”

  • Dec 7, 2018

We’ve sometimes called the yield curve our “favorite economist,” so we were amused when some enthusiastic data miner in the Treasury market tried to slip us a cheap imitation in late November.

Sep 08 2018

Beware The Policy “Narrative”

  • Sep 8, 2018

It’s been amusing to watch the narrative surrounding Fed policy evolve as the market has rallied.

Sep 07 2018

Yield Curve Proxy—A Tool For Equity Investors

  • Sep 7, 2018

The increasingly greater attention given to the yield curve by equity investors has prompted us to come up with an equity basket that can track the movement of the yield curve. Overall, it does a reasonably good job of capturing the major moves.

Aug 07 2018

Assessing The Correction

  • Aug 7, 2018

How do today’s cyclical conditions stack up with those accompanying other stock market declines? 

Jun 07 2018

What The Curve Does And Doesn’t Tell Us

  • Jun 7, 2018

The gap between the 10-year Treasury yield and the federal funds rate has narrowed sharply in the last year but remains a long way (~110 basis points) from inverting.

Jun 07 2018

All Crowded Trades Are Vulnerable—Even The Yield-Curve Flattener

  • Jun 7, 2018

Bond market volatility picked up quite a bit in May but the higher-low/higher-high pattern in the 10-year yield is still intact, indicating the primary uptrend has not reversed.

Mar 07 2018

U.S. Rates: Looking For A Dip

  • Mar 7, 2018

The U.S. 10-year ended the month 15 bps higher but non-U.S. bonds fared much better with bond yields in Europe and Japan 4-5 bps lower.

Dec 07 2017

Anatomy Of A Flattening Cycle—Flatter For Longer

  • Dec 7, 2017

The calm appearance of the 10-year yield masked a big curve-flattening move that has accelerated the last few months.

Oct 06 2017

Stocks And The Economy

  • Oct 6, 2017

The stock market is often maligned as a poor economic forecaster, and it’s true the market has predicted several more recessions than have actually occurred.

Jul 07 2017

Bond Conundrum—This Time Is Not That Different

  • Jul 7, 2017

Despite the late reversal in rates and the yield curve, the flattening trend of the yield curve remains intact. The fact that longer-term bond yields have fallen while the Fed is raising rates brings back memories of the “bond conundrum” episode during 2004-2006.

Apr 28 2017

Is The Yield Curve Overrated?

  • Apr 28, 2017

The U.S. yield curve has flattened in the last few months but remains a long way from inversion—an event that’s preceded each of the last eleven recessions.

Jul 08 2015

Navigating The First Rate Hike

  • Jul 8, 2015

Our current view is the lift-off will be December or later. Assuming inflation will pick up and the Fed hikes the rate by the end of 2015, stocks will perform relatively well, with international stocks a better bet than U.S. stocks.

Jun 05 2015

Steeper Yield Curve: All About Inflation

  • Jun 5, 2015

The steepening move in the yield curve is prevalent across many countries and is primarily driven by higher inflation expectations.

Aug 06 2014

Yield Curve Too Flat? Short Term Maybe, Longer Term Probably Not.

  • Aug 6, 2014

With the Fed policy approaching actual tightening, the market is trying to price in a rate hike in the next year or so. This is a rather typical market response.

Apr 07 2014

Twisty Curves

  • Apr 7, 2014

The short end of the yield curve sold-off to price in an earlier-than-expected rate hike, while the long end rallied as the prospect of tightening reduced longer-term inflation expectations.

Sep 10 2013

Duration: It’s Not Just For Bonds Anymore

  • Sep 10, 2013

We measure the sensitivity of common stocks to changes in interest rates using Implied Equity Duration. Growth-oriented sectors tend to have higher duration than Value-oriented sectors, while regional differences are largely explained by interest rate and risk premium differentials.

Jun 06 2013

Global Yield Curve Confirms “Muddle Through” View

  • Jun 6, 2013

The global yield curve is in a sideways range bound pattern, indicating anemic demand for credit. An examination of developed and emerging countries confirms our “muddle through” view.

Oct 05 2011

Risk Contagion Underway, But There Is A Silver Lining

  • Oct 5, 2011

A Risk Contagion is now underway, and we continue to stay defensive and favor higher quality assets within the fixed income space. A silver lining: When the Risk Aversion Index moves above 1, odds start to favor a decrease in risk aversion going forward. The bulk of the move is probably done.

 

Aug 04 2011

Market Interrelationships: “Unlearning” What We Thought We Knew

  • Aug 4, 2011

Doug Ramsey examines several once very reliable relationships between stocks, bonds, inflation, and commodities.

Sep 05 2007

Demise Of The Inverted Yield Curve...Greatly Exaggerated?

  • Sep 5, 2007

Recession risks don’t disappear the day the yield curve rights itself....the “window of vulnerability” extends for quite some time.

 

Aug 05 2007

Yield Curve Moved Positive In May, But We Are Not Out Of The Water

  • Aug 5, 2007

The yield curve has moved away from inverted status, leading many to conclude the possibility of recession has been avoided. However, a look at past recessions reveals that a reversal of an inversion typically occurs prior to the economic decline– ranging from 6 months to over a year in advance.

Feb 05 2007

View From The North Country

  • Feb 5, 2007

Doug Ramsey steps in as guest commentator in this month’s “View From The North Country” to highlight what we currently see as the bullish arguments for the stock market and contrast those with the bearish arguments.

Jul 04 2006

Economic Outlook

  • Jul 4, 2006

It may be difficult for the economy to prolong its expansion, with the auto and housing sectors weakening, and consumer spending a big question mark. 

May 03 2006

Economic Outlook

  • May 3, 2006

Continue to project higher interest rates over the next six months, particularly longer maturities. After rate hike in May, Fed’s actions will be more “data driven”.

Apr 05 2006

View From The North Country

  • Apr 5, 2006

Steve presents the transcript of his April 3rd interview with Barron's Senior Editor, Sandra Ward.

Apr 05 2006

Has The Yield Curve Lost Its Luster?

  • Apr 5, 2006

The traditional definition versus the new definition of an inversion...How real GDP has responded historically to past yield curve inversions….Effect of inversions on Financial stocks.

Mar 05 2006

View From The North Country

  • Mar 5, 2006

The persistent rise in short term rates could have a big impact on the consumer. The rising prime rate has boosted debt service costs substantially, and “Financial Death Traps” may be on the horizon.

Mar 05 2006

What Does An Inverted Yield Curve Imply For The Financials?

  • Mar 5, 2006

Conventional wisdom states that inverted yield curves are bad for Financial groups. Doug Ramsey looks at the history of past inversions.

Mar 05 2006

Economic Outlook

  • Mar 5, 2006

It may be difficult for the economy to prolong its expansion, with the auto and housing sectors weakening and consumer spending a big question mark. 

Feb 05 2006

Is The Inverted Yield Curve Signaling An Equity Bear Market?

  • Feb 5, 2006

Jim Floyd looks at yield curve inversion as a predictor of bear markets. There is some correlation, but the relationship is far from perfect.

Feb 05 2006

Economic Outlook

  • Feb 5, 2006

It may be difficult for the economy to prolong its expansion, with the auto and housing sectors weakening and consumer spending being a big question mark.

Jan 04 2006

Economic Outlook

  • Jan 4, 2006

The current economic expansion is considered late stage.

Jan 04 2006

Today's Yield Curve Inversion May Not Be Particularly Meaningful

  • Jan 4, 2006

Many economic recessions are preceded by inverted yield curves, but not all. There have been several inversions that have not immediately preceded a recession.

Oct 05 2005

Economic Outlook

  • Oct 5, 2005

Still bearish on the bond market. Boosting bond market target yields based on rising inflation and further Fed tightening.

Sep 05 2005

Economic Outlook

  • Sep 5, 2005

Still bearish on the bond market. CPI inflation could continue to surprise on the upside; the economy never did hit a soft patch; and Fed may still make several more rate hikes.

Aug 03 2005

Economic Outlook

  • Aug 3, 2005

Still bearish on the bond market. From today’s low interest rate levels, there is not much upside, but downside is significant!

Jul 04 2005

Economic Outlook

  • Jul 4, 2005

Still bearish on the bond market. May deficit report encouraging.

Jun 04 2005

Have Falling Long Term Rates Ever Contributed To A Flattening Yield Curve Before?

  • Jun 4, 2005

Jim Floyd looks at the history of flattening yield curves. It is very rare for short rates to be rising with long rates coming down, which is what we are seeing in the current environment.