Tag: 10-year Treasury note

Should We Believe The 'Transitory' Story?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


The bond market may have stopped listening to the Federal Reserve, but that doesn't mean we shouldn't know what the voting members of its monetary policy committee are thinking. What's clear is that they're not as united as they were at their last meeting just two weeks ago, when they voted nearly unanimously to raise interest rates by 25 basis points, with only Minneapolis Fed President Neel Kashkari voting against.

Now, no sooner was the vote cast, but it appears that it at least one member, maybe two, have misgivings about voting for the increase. At the very least, they're not as much in a hurry to raise rates again soon, if not until the end of this year, if not even later.

Still, as you would expect – or hope for – in a body of intelligent people, there's a strong difference of opinion on what the Fed should do next as it concerns interest rates. Continue reading "Should We Believe The 'Transitory' Story?" →

So The Fed Raised Rates: Why Is the Market Acting Surprised?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


It never ceases to amaze me how some people still react to and hang on to the words of former authoritative figures long after they’ve ceased to be relevant.

The other day 76-year-old Martin Sheen – Charlie’s father, for those under 40 – led a group of liberal has-beens and C-list “celebrities” urging Republican members of the Electoral College not to authenticate Donald Trump’s election. Does Sheen really believe people still care about what he thinks, if they ever did? Guess so.

While I admit that Janet Yellen and the other members of the Federal Reserve have hardly reached Martin Sheen status as irrelevant, I have to wonder about the market’s reaction to Wednesday’s decision by the Fed to raise interest rates an entire quarter point. Why did anyone care? Continue reading "So The Fed Raised Rates: Why Is the Market Acting Surprised?" →

Is The Spike In Bond Yields Trump's Fault?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


Pretty much ever since Donald Trump threw his hat into the ring to run for president about 18 months ago, he’s been blamed for any number of things that have upset some people, no matter how preposterous.

He’s been blamed for recruiting Muslim fanatics to fight for ISIS. He’s been blamed for inciting violence at his own rallies, plus the riots that have followed his election. A middle school teacher in Berkeley, California - where else? - Blamed Trump after she had said she received an anonymous threat from neo-Nazis. I suppose if I spent enough time researching it I could find someone blaming Trump for killing Lincoln and Kennedy, the two World Wars and global warming - you just know he must have had something to do with that!

Now, since his stunning upset victory in the U.S. presidential election, bond yields have spiked to their highest levels since last January, and many people are putting the blame on him for that. Continue reading "Is The Spike In Bond Yields Trump's Fault?" →

How To Profit From Brexit - Guaranteed!

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


With interest rates plunging all over the world, including right here in the U.S., many fixed-income investors are scratching their heads about where they can find something that pays more than 1% without taking on a pile of risk.

The answer is right under their noses. Plus, the return is way better than you can get on stocks and bonds (even gold!). Not only that, but the return is guaranteed.

What is this magic investment? Continue reading "How To Profit From Brexit - Guaranteed!" →

Are We Ready For Negative Interest Rates?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


With interest rates on 10-year Japanese government bonds already deep into negative territory and comparable German bunds just a basis point or two away, most of the world’s safest debt instruments are trading below zero. With the notable exception of U.S. Treasuries.

While we’re still a long way from reaching that point – the benchmark 10-year Treasury note ended last week at 1.64%, its lowest level in nearly a year-and-a-half and down more than 60 basis points so far this year – it’s certainly not too early to start thinking about it. After all, if it can happen in Germany and Japan and several other countries, why not here?

Switzerland’s 10-year government bond closed last week at negative 0.50%, while the comparable Japanese bond ended at minus 0.15%.
Germany’s 10-year bund, the benchmark for the euro zone, closed at just two basis points above zero. The average yield on all German government debt outstanding is now below zero.

In real life, this means that if you buy a Swiss or Japanese bond today and hold it to maturity, you’re guaranteed to lose money. Such a deal.

What’s driving this madness? Continue reading "Are We Ready For Negative Interest Rates?" →