The five-year treasury yield hit a multi-year high relative to the average of the two- and the ten-year rates (the 5-year treasury is cheap on a relative basis). The chart below shows a measure of how “concave” the treasury curve has been over time (ne…
Many continue to argue that the rate normalization taking place now will slow business activity in the US. Good luck betting on that however. There is no question that corporate America had benefited tremendously from extraordinarily low rates. Many US…
Treasuries once again experienced what amounts to a sharp curve flattening in recent days. The market action resembled what took place after the initial announcement of taper back in December (see post). The yields in the “belly” of the curve have risen sharply as the market prepares for rate “normalization”.
As the Fed cuts its buying program, we are left with two major categories of purchasers – foreign and private domestic.
The treasury yield curve remains quite steep by historical standards. Typically such steepness is driven by expectations of higher inflation in the future. But as discussed earlier, that is not the case in the US (see post). Instead it is the expectati…
Since the Fed announced the reduction in securities purchases (“small taper”), the treasury curve has undergone some strange adjustments. Here is what the impact has been since the close on December 17th. Why would the 5-year note sell off the most whi…
This is a syndicated repost published with the permission of Sober Look. To view original, click here. Opinions herein are not those of the Wall Street…
Funny, just yesterday afternoon we pointed out the irony of nobody caring about the fact that Bill Gross had loaded up the boat on the long end of the yield curve, a gamble that obviously meant one thing: He sees no growth or inflation ahead — esse…
Market expects Operation Twist in Sept
On Friday September 2, 2011, 2:44 pm
By Emily Flitter
NEW YORK (Reuters) – U.S. government bond investors see Federal Reserve action to boost the flagging economy as practically a done deal after Friday’s dismal…
It shows us, once again, that when cornered the banks will be propped no matter what the populace says. They are using the phrase “blasting the short end of the yield curve.” It seems to me that this cycle will be over when the banking system as we cur…