Category Archives: Bond Market

Fed staff lose hope on inflation

Hidden inside the minutes to the Fed’s 30 April meeting is an alarming paragraph that suggests Fed staff have grave concerns about inflation expectations. The staff’s forecast for inflation was revised down slightly, reflecting some recent softer-than-expected readings on consumer … Continue reading

Posted in Bond Market, FOMC, monetary policy, USD | 3 Comments

troublesome t-bills

Last night’s four week US T-bill auction result was a little odd. The auction of US$30bn of four week paper was well enough covered (~83bn of bids v. ~30bn of paper), however the results reveal a fairly large change of sentiment. … Continue reading

Posted in Bond Market, economics, monetary policy, US politics | Tagged , | Leave a comment

FED can still sep-taper

Last night’s price action spoke to the virtues of sleeping deeply and turning off your phone. First, better than expected data drove yields higher (US 10yrs tipped 2.7%) and then the Fed downgraded their growth assessment and sounded more worried … Continue reading

Posted in Bond Market, FOMC, monetary policy, USD | Tagged , , | 9 Comments

QE-outlook dims as Summers brightens

The QE outlook has started to dim, as Lawrence Summers firms as favourite to replace Bernanke next year.  This seems to be a bearish bonds / bullish USD development. Yesterday, Hilsenrath published an article in the Journal suggesting that Summers … Continue reading

Posted in Bond Market, FOMC, monetary policy, US politics, USD | Tagged , , | 10 Comments

The regulatory bond-bid (+ bank funding)

In my recent post regarding central bank balance sheet operations and bond market term premium (see how QE works), there’s a rather large unexplained divergence between model and reality in the most recent period. A reason for this may be the … Continue reading

Posted in Banks, Bond Market | Tagged , , | 2 Comments