Posts filed under “Federal Reserve”

Further Yield Curve Inversion “a Given”

Or so says the Treasurys team at Jefferies & Co. in New York.

I cannot say I disagree. The 10-year Treasury is looking to trade between 4.48% and 4.62% this week.

Further, with at least one and likely two and possibly three and an outside chance of four more Fed Reserve tightenings, the curve is likely to invert further:

"Market participants are having an easier time swallowing the idea that short-term rates are likely to remain higher for a while than longer-term ones. Some participants have said they expect this aberration, known as a yield-curve inversion, to last for the rest of the year.

Late Friday, the two-year Treasury was yielding about 0.12 percentage point more than the 10-year Treasury and 0.15 percentage point more than the 30-year Treasury.

The Treasurys team at Jefferies & Co. in New York said further inversion of the yield curve is basically a given.

That is because government sales of $22 billion of two-year Treasurys tomorrow and $14 billion of five-year Treasurys Thursday will likely add pressure to those maturities and send their yields higher. Month-end buying by longer-term investors who need to match their portfolios to extensions in benchmark indexes will likely support 10- and 30-year maturities and send those yields lower."


Source:

Treasurys May Remain Steady As Yield-Curve Inversion Persists
SHAYNA STOYKO
WSJ, February 20, 2006; Page C10
http://online.wsj.com/article/SB114040272292478175.html

Category: Federal Reserve, Fixed Income/Interest Rates, Inflation

A Curious Dependency on Data

Category: Economy, Federal Reserve

Secular Changes in Interest Rates

Category: Federal Reserve, Inflation, Markets

Economists React to Bernanke Testimony

Category: Economy, Federal Reserve

Bernanke Speaks

Category: Federal Reserve

The Longest 8th Inning in the History of Baseball

Category: Federal Reserve, Investing, Markets, Psychology

Chart of the Week: S&P500 (12 months), Fed Edition

Category: Federal Reserve, Technical Analysis

Connect the Retail Sales Dots

Category: Data Analysis, Economy, Federal Reserve, Retail

New Column: The Street Gets Inflation Threat Backwards

Category: Employment, Federal Reserve, Inflation, Investing, Markets, Psychology

Sourcing the Greenspan Chatter

This is the article that the Greenspan quote came from that popped the market today; I don’t know how accurate it is (holographic image?) but

Gold price riding high on fear of terrorism, says Greenspan
Leo Lewis, Tokyo
February 09, 2006
http://tinyurl.com/98gdp

Excerpt:

"ALAN Greenspan, who stepped
down last week as chairman of the US Federal Reserve after 18 1/2 years, has
blamed the threat of terrorism for the high gold price, in his first private
sector speech since being let off the leash of officialdom.

According to
members of his audience of international investors – watching a holographic
image in Tokyo as he spoke in New York – Greenspan said the high cost of gold
did not reflect inflation or the strength of commodities, but rather a fear
among investors of a major geopolitical conflict. There were people who believed
that a nuclear weapon could be detonated within five years, the former American
central bank supremo said.

The low probability of such an event occurring would not necessarily avert a
spike in the gold price, he added.

Greenspan went on to discuss a range of topics, including the problems
created by a lack of investment in refining capacity by the oil industry. He
said this failure by the oil majors meant that the era of cheap energy was
almost surely over.

The former Fed chairman is also said to have indulged in a moment of
self-criticism over the central bank’s failure to prevent the market bubble in
the late 1990s.

That may explain Gold’s $20 whackage yesterday, but what about all the rest of the metals and commodities?

Also, if you missed this, you MUST read it:

GREENSPAN SENDS MIXED SIGNALS IN FIRST DAY AT HOME
Former Fed Chief’s Inscrutable Statements Baffle Wife
http://www.borowitzreport.com/archive_rpt.asp?rec=1307&srch=

Its a hoot!

and on the chance the article disappears, I’ll archive it after the jump . . .

Read More

Category: Federal Reserve, Inflation, Investing