I’ve been in meetings all morning so apologies for being a little late on commentary. As I’m back at the screens it seems like the 1% to 2% 10-year note community has really stepped up the rhetoric today. The push back to 2.85% was enough to bring out the big guns –...
Surprisingly, global fixed income asset prices were little changed on balance since our last monthly publication. US Treasury and German Bund 10 year yields were about 2.80 and 2.40 respectively on our August publication date, and they are exactly at those levels as...
It was a long a painful August for the bond bears. But the back to school season has been oh so kind. From the August 25th lows of 2.41% we are ending this week nearly 40bps higher! There will be plenty of Japan obsessed folks out there with 2.00% 10 year (and even 30...
The FOMC meeting from August 10th remains a puzzle for the ages. It took a day to settle in, but the market got spooked by what can only be described as some of the worst FOMC communication policy in history! By cob August 11th spoos had dropped from 1120 to 1080 and...
Agency mortgage speeds were out last night so it’s time to look at what the Fed will lose. Based on our estimates of the current SOMA MBS holdings (see page 9 of the Monthly for our most recent numbers), the SOMA will pay down about 18b with 1bio in 4s, 7bio in 4.5s,...
As promised I am back with some mortgage data for everyone to chew through. As regular readers are aware, there is one chart that I believe continues haunt the prospects for a US recovery. That is the first chart attached and it shows that even as the funds rate has...
This is the key passage from the minutes on the thought process driving the reinvestment strategy decision – “members generally saw both employment and inflation as likely to fall short of levels consistent with the dual mandate for longer than had been anticipated....
I have gone back over “the speech” a couple times this weekend. Given all the confusion post the 10-Aug FOMC meeting, I think this speech deserves at least a couple of reads - at the moment it is our clearest read into current FOMC thinking. As I pointed out on Friday...
There is nothing here to comfort risk markets. The Fed is going to buy more Treasuries as a means to ease “if needed”. He presented 4 possible easing choices - 3 of which are basically worthless in my opinion: buying more USTs, communication (i.e. moving to a “really...
I want to start with a quote from Ben in 2003 that I used in yesterday’s commentary. I’m repeating it today because it is VERY important – “when nominal interest rates are at or near zero, the central bank can lower the real rate of interest only by creating...
I want to start with a quote from Ben in 2003 that I used in yesterday’s commentary. I’m repeating it today because it is VERY important – “when nominal interest rates are at or near zero, the central bank can lower the real rate of interest only by creating expectations of inflation on the part […]
