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Category: Bonds

Inverted Yield Curves and Recessions

Any way you look at it, the US yield curve is flattening: The spread between 30-year and 10-year yields has moved down to 0.18%, the narrowest since July 2007. The spread between 10-year and 5-year yields has moved down to 0.14%, also the narrowest since July 2007. The spread between 10-year and 2-year yields has […]

When Cash Is King

Cash is king. At least for the moment. Data Source: S&P Dow Jones Indices. In the first quarter of 2018, short-term Treasury bills finished higher while both the S&P 500 and 10-Year Treasury bond declined. The greatest fear among many investors is that this trend will continue. Is this a rational fear? How often has […]

  • Posted in Bonds, Markets
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U.S. Mortgage Rates have risen for 9 consecutive weeks, hitting their highest levels since January 2014. Source Data: Freddie Mac That certainly seems like a sharp increase, but is 4.46% high? Only when compared to recent history, which includes the all-time low in yields from November 2012 (3.31%). In a historical context, mortgage rates today […]

  • Posted in Bonds, Housing, Markets
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At 2.9%, the 10-Year Treasury yield is near its highest level in the past 4 years. At the current rate of inflation (2.2% CPI in the past year), this translates into a real yield of 0.7% (real yield = nominal yield minus inflation). Is such a real yield good or bad value for Treasury bond […]

  • Posted in Bonds, Inflation
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Is Cash No Longer Trash?

Short-term bond yields (1-month through 3-years) are hitting their highest levels in over 9 years. Why? The market (Fed Funds Futures) is expecting the Federal Reserve to hike rates 3 more times in 2018: a 25 basis point move in March, a 25 basis point move in June, and a 25 basis point move in […]