Bond traders predict that the Federal Reserve‘s interest-rate cuts will go well beyond what the agency has forecast for the next nine months. Traders in the U.S. rates options market expect a much higher 3 percentage points worth of cuts by March. This dwarfs the Fed’s recent projections of just 25 basis points of reductions by the end of 2024 and a total 125-basis-point cut by the end of next year, Bloomberg reported. Options-market activity related to the secured overnight financing rate over the past three sessions show a significant upside if the Fed reduced its key rate by 300 basis points to 2.25% by next year’s first quarter. Also Read: Bank Stocks Trend Upward As Fed Shares

Markets are expecting the neutral rate — a theoretical rate that remains stable due to full employment and stable inflation — to stay higher than policymakers are forecasting. What does this mean for bond exchange-traded funds? A higher neutral rate may limit the Federal Reserve’s ability to cut interest rates, possibly causing headwinds for bonds, Bloomberg reports. Forward contracts on the five-year interest rate in the next five years — a proxy for the market's view of where U.S. rates might land — have stagnated at 3.6%. That is down from last year's peak of 4.5%, but it's still more than one full percentage point higher than the average over the past decade and above the Fed's ow

The traditional 60/40 investment portfolio has recorded a remarkable year of growth in 2023, sharply rebounding from a disappointing year in 2022. As of Dec. 27, the year-to-date performance of the 60/40 portfolio, benchmarked by the iShares Core Growth Allocation ETF (NYSE:AOR), stands at approximately 13%. This performance figure ranks as the third-best year for the strategy since its inception in 2008, trailing only behind the strong years of 2009 and 2019. As we enter the new year, investors are pondering whether the favorable conditions that supported both equities and bonds in the second half of the year will endure. 60/40 Portfolio In 2022-2023: From Downturn to Upswing T

In recent weeks, several bond exchange-traded funds (ETFs) have experienced a significant surge in inflows, indicating a heightened interest among investors. This shift coincided with a market that significantly upped bets on Federal Reserve rate cuts for 2024, backed by a robust and ongoing disinflationary trend in the U.S. economy. Speculators have gone as far as factoring in an initial rate cut as early as March 2024, with whispers of a total of five rate cuts by December 2024. But which bond ETFs are currently piquing investors’ interest? From ‘Cash-Like’ to ‘Equity-Like’ While the third quarter in 2023 witnessed a notable uptick in inflows into cash-linked bond ETFs, pr

Congressman Kurt Schrader of Oregon was last covered by Benzinga for his trades on Ameren Corporation (NYSE:AEE) and SLB (NYSE:SLB), which were made on Oct. 13 and Oct. 26, respectively. Since those trades were made, Ameren has shown returns of roughly 15.6%, while SLB is down roughly 9.7%. Furthermore, SLB has been declining ever since it hit its 52-week high of $56.04 per share, which would have resulted in positive returns of 7.8% if actualized. Schrader, a Democrat, has made over 450 trades in the past three years. His most trade was Nuveen ESG Large-Cap ETF (BATS:NULC), which he recently sold between $15,000 to $50,000 in shares on Nov. 8, per Capitol Trades. See Also: This Congressm

Japanese institutional managers are fueling the bond selloff just as the Federal Reserve pares its $9 trillion balance sheet, writes Bloomberg. The latest data from BMO Capital Markets show that the largest overseas holder of Treasuries has offloaded almost $60 billion over the past three months.  Bloomberg says that though it may be a small change relative to Japan's $1.3 trillion stockpile, the divestment threatens to grow.  The monetary path between the U.S. and Japan is diverging evermore, the yen is at 20-year lows, and market volatility stateside is breaking out.  "It's a significant amount of selling and on par with what we saw in early 2017 from Japan," said Ben Jeffery, BMO's

According to a new report, global sovereign debt is expected to climb to a whopping $71.6 trillion in 2022, while fresh borrowing is also anticipated to remain high, writes CNBC. In its second annual Sovereign Debt Index, British asset manager Janus Henderson projected a 9.5% rise in global government debt, driven primarily by the U.S., Japan, and China. According to the report, global government debt jumped 7.8% in 2021 to $65.4 trillion, while debt servicing costs dropped to $1.01 trillion, an effective interest rate of just 1.6%. However, debt servicing costs are set to rise significantly in 2022, climbing around 14.5% on a constant-currency basis to $1.16 trillion. “The pandemic has h