Highlights Fiscal stimulus is no longer a free lunch. US mortgage applications are down by 20 percent since the start of February. With rising bond yields now starting to choke private sector borrowing, bond yields are nearing an…
Highlights Duration & The Fed: Unlike the bond market, the Fed is being intentionally cautious about how quickly it revises its interest rate expectations higher, focusing more on hard economic data than on surveys. We expect the…
Dear client, Next week, in lieu of our weekly report, I will be hosting a webcast on Thursday, March 25 at 10:00 am EDT and Friday March 26 at 9:00 am HKT. I look forward to your comments and questions during the webcast. Best regards…
Highlights Stimulus checks will not be inflationary. Most households will regard them as additional wealth, and the propensity to spend additional wealth is very low. The bond market’s model for predicting inflation is the…
Highlights With the vaccination campaign in full gear and plenty of fiscal support in the pipeline, investors have swung from worrying that the US economy will grow too slowly to worrying that it will grow too fast. Thanks to the…
Dear client, In addition to this week’s abbreviated report, we are also sending you a Special Report on currency hedging, authored by my colleague Xiaoli Tang. Xiaoli’s previous work mapped out a dynamic hedging strategy for…
Highlights Chart 1Back To Fair Value February was a terrible month for the bond market. In fact, the Bloomberg Barclays Treasury Master Index returned -1.8%, its worst month since November 2016. The 5-year/5-year forward…
Dear Client, In addition to this week’s abbreviated report, we are sending you a Special Report on Bitcoin. I don’t recommend you buy it. Best regards, Peter Berezin Highlights Real government bond yields have…
Highlights Chart 1Inflation Indicators Hook Up There’s no doubt that inflationary pressures are building in the US economy. The latest piece of evidence is January’s ISM Manufacturing PMI which saw the Prices Paid…