Powell says Fed’s peak rate is higher than expected–but how high?
Right now, the Federal Reserve’s benchmark short-term interest rate stands at a range of 3.75% to 4.00. Expectations on Wall Street point to another 50 basis points in December and another 50 basis points in February.
Which would take the interest rates up to a range of 4.75% to 5.00%. Would that be the peak?
Rising bond yields and higher odds of bigger hikes from the Fed at December meeting cap stocks
The two-day bounce in U.S. stocks stalled today. The Standard & Poor’s 500 closed down 0.67% and the NASDAQ Composite was down 0.40%. Why? Increased sentiment that the Federal Reserve will raise its target short-term interest rate by a hefty 75 basis points at its November 2 meeting and its December 14 session. While the 75-basis-point increase at the November 2 meeting has been expected for some time, the shift in sentiment for the December 14 meeting is new.
Saturday Night Quarterback says, For the week ahead look for…
Be on the lookout for extra volatility in the market for Treasuries. …signs of stress in the market for U.S. Treasuries. Treasury Secretary Janet Yellen is concerned, she said on Wednesday in answering questions after a speech. “We are worried about a loss of adequate liquidity in the market,” Yellen said. The balance-sheet capacity of broker-dealers to engage in Treasuries market-making hasn’t expanded much, while the overall supply of Treasuries has climbed, she noted.
Bonus Special Report: Where to Park Your Cash
The advice is sound, very sound. Move part (at least of your portfolio to cash and sit out the worst of this bear market on the sidelines. And since you have that cash in hand, you’ll be ready to snap up bargains when the market has put in a bottom (or near the bottom, or on the way up from the bottom…or something.) But right now that’s easier said than done.
CPI inflation report tomorrow won’t be pretty, economists say
Economists surveyed by Reuters are projecting that inflation, as measured by the Consumer Price Index (CPI), will climb to 8.4% year over year for March against an 8% rate in February when data is released tomorrow before the open of the U.S. stock market.
Treasury yield curve inverts–a Recession indicator drops into place
Yesterday, March 28, a substantial piece of the Treasury yield curve fell into inversion. The yield on the 5-year Treasury climbed to 2.57%. Which put it above the yield of both the 10-year Treasury at 2.46% and the 30-year Treasury at 2.55%.
Ooof! Yield on 10-year Treasury hits 2.38% at the close today
As of the close today, Tuesday, March 22, Treasuries had sold off steeply raising the yield on the 10-year Treasury to 2.38%, a huge (for the Treasury bond market) 9 basis points. The rout took the yield on the 2-year Treasury to 2.16%. On Friday,March 18, the 2-year Treasury yielded 1.94%. The bond market is taking yesterday’s comment/promise/threat from Fed chair Jerome Powell seriously
Special Report: A Recession is Coming–Part 1: Three Portfolio Strategies for a Recession today; Part 2: 10 Recession Stock Picks to come tomorrow
A Recession is coming! Probably.The odds are now high enough so that you and your portfolio should pay attention. So there are really three important questions. First, how likely is a Recession?In this Special Report I’m going to lay out the reasons for thinking that a Recession is on the way. Probably in the second half of 2022 or in 2023. Second, what strategies should you, as an investor, use to navigate in your portfolio through a Recession? In this Special Report I’m going to explain three strategies–call them general rules of the road–for investing during (and after) a Recession.
And, third, what specific stocks or bonds or ETFs or options should you use to implement those strategies to give you the biggest investing edge possible during this Recession? That’s where the 10 Recession Stock Picks come in. Look for that post tomorrow, March 22.
Saturday Night Quarterback says, on a Sunday, For the week ahead expect…
Inflation fears and projections of interest rate increases from the Federal Reserve continue to run amuck. It’s important to remember that the financial markets tend to over shoot on both the upside and the downside. And right now, boy, are they in overshoot mode.
U.S. national debt hits $30 trillion faster than projected
America’s gross national debt topped $30 trillion for the first time last week. In January 2020, before the pandemic, the Congressional Budget Office projected that the gross national debt would reach $30 trillion by around the end of 2025. The question to me isn’t “Does this matter?” But “In what way does this matter?”
Please watch my new YouTube video: Trend of the Week Even More Volatility in Treasuries
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My ninety-second YouTube video “Trend of the Week Even More Volatility in Treasuries” went up today.