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%.
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
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.
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.
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?”
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.
The yield on the 10-year Treasury is up 6 basis points to 1.54% and is now up 60 basis points in the last year. You sure could see this as evidence that yields are headed toward the magical 2% level in 2022. But we’re been here before in 2021.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My eighty-first YouTube video “Why the Fed is bluffing on interest rates” went up today.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My eightieth YouTube video “Trend of the Week: Ten-Year Treasury Notes are Tracking Volatility” went up today.
After today’s meeting of the Federal Reserve’s Open Market Committee the U.S. central bank said it would start slowing the pace of its monthly $120 billion in asset purchases this month. The slowdown would take place at a rate of $15 billion a month, which implies an end to the program by the middle of 2022.
As bond yields have tumbled because of the Federal Reserve’s lower interest rates for longer monetary stance, investors have compensated by buying longer duration bonds. The logic is pretty simply. A one-year Treasury now yields 0.11%. A two-year Treasury pays 0.45%. A five-year Treasury yields 1.18%. The benchmark 10-year Treasury was paying 1.61% at the close today, October 26. Want more yield? You can buy the 30-year Treasury for a yield of 2.04%. The problem is that the longer the duration of a bond–the more time until maturity–the bigger the downward move in bond prices if/when the Federal Reserve decides to raise interest rates or if/when the financial markets decide to anticipate a Fed move by selling bonds ahead of any move by the U.S. central bank.
More than 2 million options on the September 10-year Treasury expire by the end of trading tomorrow, August 27. That’s 63% of all options open interest in Treasuries. It “looks” like the positioning of those Treasury options is relatively balanced. Bloomberg reports that data from JPMorgan Chase show that the bank’s clients have pulled back on short bets on a steeper yield curve after tomorrow’s speech (10 a.m. New York time) by Fed chair Jerome Powell. But I wouldn’t bet against some extra volatility tomorrow.
