With Congress raising the debt-ceiling and both sides of the aisle grumbling about the outcome, the debate over the mechanics of paying for the U.S. government’s obligations and the close call with default now fades back into obscurity. Until the next time. Assuming Congress won’t do away with the debt ceiling and push all spending…
Minutes of the Federal Reserve’s May policy meeting show that officials were divided over the path forward. At their meeting, the Fed hiked its benchmark interest rate by a quarter of one percentage point to a range of 5%-5.25%. The central bank also altered its forward guidance to indicate it could pause at their next…
The bond market hasn’t been this popular for over a decade. For almost 15 years after the financial crisis of 2008, bond yields remained low and the U.S. stock market was much more appealing. That’s no longer the case. Treasury bills TMUBMUSD01Y, 5.246%, which are arguably the safest debt, are now offering yields well above…
Treasury yields eased Friday ahead of the release of key inflation data. What’s happening The yield on the 2-year Treasury TMUBMUSD02Y, 4.497% was 4.51%, down 3.6 basis points. Yields move in the opposite direction to prices. The yield on the 10-year Treasury TMUBMUSD10Y, 3.784% was 3.8%, down 2.5 basis points. The yield on the 30-year…
The numbers: A strong U.S. economy and concerns about a potential U.S. default on its debt pushed mortgage rates higher this week. The 30-year fixed-rate mortgage averaged 6.57% as of May 25, according to data released by Freddie Mac on Thursday. It’s up 18 basis points from the previous week — one basis point is…
Congress and President Biden are currently pretending to debate whether or not to raise the so-called debt ceiling from its current legal level, which is $31.4 trillion. “Pretending?” Yep. To hear both sides talking, you’d think this was some kind of debate about whether to raise the U.S. national debt above…er…“$31.4 trillion.” Cue laughter. U.S….
Financial markets are bracing for U.S. debt-ceiling talks to come down to the wire, putting the U.S. government dangerously close to a default, as the long Memorial Day weekend approaches. Stocks closed lower Wednesday, with the Dow Jones Industrial Average DJIA, -0.77% posting a fourth straight session of declines, leaving the blue-chip index down 1.1%…
There’s an “epic” amount of cash on the sidelines as investors assess a slowing U.S. economy and the debt-ceiling debate in Washington, according to Rick Rieder, chief investment officer of global fixed income at BlackRock. “I’ve never seen so much money sitting in cash,” Rieder said Tuesday during a BlackRock media briefing at its New…
San Francisco Federal Reserve Bank President Mary Daly said Monday she wants central bankers to keep an open mind when they gather in June to decide what to do with interest rates at that meeting and at the other four policy meetings scheduled for this year. “I really think at this point in our tightening…
St. Louis Fed President James Bullard on Monday said he would like to see two more quarter-percentage-point interest-rate hikes this year. “I think we’re going to have to grind higher with the policy rate in order to put downward pressure on inflation,” Bullard said in a moderated discussion at the American Gas Association’s Financial Forum…
During my lengthy career in finance, I picked up several market heuristics that have generally proven more useful than not. Every January, for example, I remember the “five-day rule,” which holds that if the S&P 500’s SPX, -0.14% accumulated performance is positive over the first five days of the new year, there is around an…
Here’s a summary of how the 11 sectors of the S&P 500 SPX, -0.14% have performed his year and how forward price-to-earnings ratios compare to valuation levels at the end of 2021: Sector or index 2023 return 2022 return Return since end of 2021 3-year return 5 year return Forward P/E Forward P/E at end…
The financial fallout from half-empty U.S. office buildings has begun to be reflected in prices for bonds backed by luxury office buildings. From New York City’s famed Park Avenue to San Francisco’s California Street, properties long considered fortress investments are reeling as efforts to return more staff to office buildings in big cities stall. Recent…
The radio came blaring on when I started my car, the voice of a politician hitting me in the face as I settled in. His message amounted to “Default is a bargaining point. We’re not going to get all the way there, but we need it on the table to force the other side to…
For the first time since 2009, the 3-month U.S. Treasury bill rate is now higher than the yield on earnings derived from generally accepted accounting principles for companies in the S&P 500 Index. That’s according to Ed Clissold, chief U.S. strategist, and Thanh Nguyen, senior quantitative analyst, at Ned Davis Research. In a note this…
I often think that if you took away cable news, social media and the politicians who care more about getting on TV than solving problems, the debt crisis the U.S. is in would have been solved a long time ago. Instead, polticians have let things drag out to the point where the possibility of an actual…
This story has been updated to reflect that the Fitch debt downgrades on PacWest, Trustmark and Western Alliance took place in April. Credit rating agency Fitch Ratings on Thursday said it completed a review of the debt of 14 small and mid-sized banks in its coverage and said no further downgrades appear to be needed…
“ To stay in business, these banks did the only thing they could. ” In the wake of the failures of Silicon Valley Bank, Signature Bank and Republic National Bank, a common misconception is that these banks failed because they grew too quickly. On Tuesday, former Silicon Valley Bank CEO Greg Becker testified in a U.S….
“‘Increasing the debt limit the way Congress and presidents have repeatedly done, and most likely will do this time around, will mean there will be no meaningful limit on the debt. This will eventually lead to a disastrous financial collapse.‘ ” — Ray Dalio, founder, Bridgewater Associates That’s billionaire investor and Bridgewater Associates founder Ray Dalio,…
If the economic storms get more difficult, traders and investors seem to think the Federal Reserve will be like a lifeguard and rescue all swimmers from the rip tides. Economists see such confidence as misplaced given the high inflation environment. In general, investors and traders have been steadfast in their view they can count on…