U.S. Treasuries are poised to come in even despite having a very volatile first six months of 2024. A Bloomberg index of returns in this bond market has declined a mere 0.1% for the year. It fell as much as 3.4% in April. The rebound indicates that investor outlook might be positive in light of falling U.S. prices prompting the Federal Reserve to cut interest rates sooner. "We've seen the peak in yields," Stephen Miller, investment strategist at GSFM in Sydney, told Bloomberg. "Bonds are now back as having a deserved place in a multi-asset portfolio." Treasuries have been sent in opposite directions in 2024 as policy-sensitive two-year yields have soared above 5% in April as fea

The U.S. economy grew at an annualized rate of 1.3% in the first quarter of 2024, marking a downward revision from the advance estimate of 1.6%. This represents the slowest growth rate since the second quarter of 2022. The revision was primarily driven by a decrease in real consumer spending, which was adjusted down from 2.5% to 2%. The GDP report from the Bureau of Economic Analysis, released Thursday, also indicated a slight downward adjustment of 0.1 percentage points in both the headline and core Personal Consumption Expenditure (PCE) price index for the last quarter. The slower-than-expected growth and marginally lower inflation figures eased Treasury yields, with the 10-year

The Federal Reserve’s recent policy decision kept interest rates unchanged, continuing since July 2023. However, it announced a significant reduction in its quantitative tightening (QT) program, starting in June. QT involves selling off assets to decrease money supply and raise interest rates. This move follows massive bond purchases during the pandemic, which suppressed interest rates. While QT can help control inflation, it also reduces liquidity in the economy and can lead to higher interest rates and tighter monetary conditions. The Fed aims to avoid a repeat of the 2019 “repo crisis” caused by QT, and plans to scale back QT to $25 billion, more than half of its current rate.

Federal Reserve Chair Jerome Powell stated on Tuesday that a prolonged period of restrictive monetary policy may be necessary, refraining from offering explicit guidance on a rate-cutting strategy. Economists interpreted this as a clear indication that the central bank is likely to maintain a “higher for longer” approach. The Hawkish Schiff: Economist Peter Schiff, in a post on X (formerly Twitter), challenged Powell’s characterization of the current monetary policy as restrictive, asserting that it remains loose. Schiff advocated for rate hikes, expressing concerns that prolonged loose policy would exacerbate inflationary pressures. “The longer the Fed maintains its current policy, th

U.S. Treasury yields have reached their highest levels since mid-November 2023, driven by a mix of economic resilience, persistent fiscal spending and resuming inflationary pressures. These factors are steering the market’s expectations away from earlier predictions of imminent Federal Reserve rate cuts, significantly impacting the cost of issuing U.S. government debt. Treasury Bond ETFs Fall To Mid-November 2023 Lows On Monday, the yield on the 10-year Treasury note hit 4.61%, a peak not observed since Nov. 14, 2023. This represents a substantial increase of approximately 40 basis points since the beginning of the month. Additionally, the daily chart for the 10-year Treasur

A bond trader has just placed a record-breaking single bet by going long on December 2024 short-term interest rate futures. This strategy will pay off if the Federal Reserve cuts interest rates at least three times by the end of the year, a scenario that is not yet fully priced into the market following recent robust economic data and higher-than-expected inflation figures. The Secured Overnight Financing Rate (SOFR) futures — the tool used to assess market wagers on Fed interest rates — suggest that traders are anticipating a total of 68 basis points in rate cuts by the end of the year. What Happened: A significant transaction involving 75,000 December 2024 SOFR futures contracts

In March, the U.S. labor market surged beyond predictions, with 303,000 nonfarm payrolls added, surpassing expectations of 212,000. This marked the highest figure since May 2023 and accompanied a slight decrease in the unemployment rate from 3.9% to 3.8%. We covered it first here: US Labor Market Heats Up In March: Payrolls Grow By 303,000, Highest In 10 Months, Dampen June Rate Cut Hopes The robust report dashed hopes for Federal Reserve rate cuts, exacerbated by hawkish comments from Fed speakers, further dampening investor expectations. The unexpected decrease in the unemployment rate from two-year highs and the anticipated rise in earnings signaled a tight labor market also rei

The yields on U.S. Treasury notes have almost entirely retraced their surge following the release of the hotter-than-expected January inflation report. This indicates a swift shift in investor sentiment amidst conflicting economic indicators. The 10-year Treasury note saw a decrease to 4.21% during Thursday morning’s trading in New York. This marks a five basis point drop after a six basis point decline the previous day. This movement erased the gains seen in the wake of the inflation data. Yields are back to their pre-report levels of approximately 4.17-4.18%. Despite a higher-than-expected inflation rate for January, the anticipated impact on longer-dated maturities was short-liv

Let's Rewind 2022 and 2023 were hectic - war, bank crises, and bear markets. Inflation was still running rampant - with the core PCE having just peaked at +6.4% in February 2022. These consistent out-of-control inflation reports caused the Federal Reserve to take action by doing the only thing they know how to do - raise interest rates. Starting in March 2022, the Fed raised rates at the fastest speed in modern history - from essentially 0% to 4.75% in only 12 months. As you can imagine, this rapid increase in interest rates caused bond prices to go into a free fall. For those of you unaware, bond prices move inversely with interest rates. Think about it like this - if you're an invest

Russia launched an unprecedented aerial attack on Ukraine, firing 122 missiles and deploying numerous drones, resulting in the tragic death of at least 22 civilians. Ukrainian officials have described it as the most extensive aerial barrage since Russia’s full-scale invasion in February 2022. The Ukrainian air force claims to have intercepted most of the ballistic and cruise missiles, showcasing the country’s defense capabilities in the face of the relentless assault. See Also: Trump-Putin Friendship? Fiona Hill Reveals Putin ‘Has Trump’s Number’ And Still Views Him ‘As An Asset’ President Volodymyr Zelenskyy highlighted the diverse array of weapons used by Russia, including ba