Bond Market

Modern Monetary Magic At Work

Oct 28, 2024 3 min read

Republican Everett Dirksen was the Senate Minority Leader during the 1960s. Cautioning that federal spending had a way of getting out of control, Dirksen reportedly observed, "A billion here, a billion there, and pretty soon you're talking real money." Proponents of Modern Monetary Theory (MMT) have been claiming in recent years that the US federal government can run large budget deficits to fund social welfare programs

Ed Yardeni
Eric Wallerstein

Powell & Co. Slams The Pedal To The Metal

Sep 19, 2024 3 min read

Wow, the Fed lowered the federal funds rate (FFR) by 50bps yesterday and the economy is already responding. Jobless claims fell and two regional business surveys strengthened in September, while the Coincident Economic Index rose to a new record high, though in August! We are kidding, of course. But perhaps the economy didn't need to be stimulated so much. It appears Fed officials got their soft landing but

Ed Yardeni
Eric Wallerstein

Treasuries Anticipating Trump 2.0?

Jul 1, 2024 3 min read paid

Long-term US government bond prices fell sharply since the presidential debate on Thursday evening. The 10-year Treasury yield rose from 4.29% on Thursday afternoon to 4.48% today, the highest level since May 31 (chart). That was in spite of the lowest y/y print for the personal consumption expenditures deflator (PCED) since March 2021 on Friday and another sub 50.0 report for the M-PMI on Monday. We

Ed Yardeni
Eric Wallerstein

Anatomy Of The Bond Yield

May 20, 2024 2 min read paid

We expect that the 10-year US Treasury bond yield will remain rangebound between 4.00% and 5.00% for the foreseeable future. We expect to see it more often below 4.50% (the mid-point of the range) than above it. This is consistent with our view that interest rates have normalized: They are back to where they were prior to the "Great Abnormal" period from the Great Financial

Ed Yardeni
Eric Wallerstein

The Blob Keeps Growing. So Why Aren't Bond Yields Soaring?

May 13, 2024 2 min read

The federal deficit narrowed a bit to $1.63 trillion over the 12 months through April (chart). However, over the same period, the US Treasury had to raise $2.63 trillion by issuing marketable securities, which now total a record $26.9 trillion. The Treasury had to borrow more than the deficit to replenish its checking account at the Fed, which was down to almost zero last June. The blob

Ed Yardeni
Eric Wallerstein

Market Call: Loop-The-Loop

Apr 28, 2024 2 min read

Keep your seat belts on: There may be a few more loop-the-loops in the stock market's rollercoaster ride. Or at least wear a neck brace. It's been a wild ride recently. After peaking at a record high on March 28, the S&P 500 plunged below its 50-day moving average and rose last week closing just below this average (chart). Geopolitical risks remain high, though

Ed Yardeni

Hawks Fly Higher For Longer Than Doves

Apr 16, 2024 2 min read paid

It's official: Fed Chair Jerome Powell confirmed today that he and his colleagues aren't convinced that inflation is coming down fast enough to consider cutting the federal funds rate (FFR) any time soon: "The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence," Powell said at a moderated

Ed Yardeni

No Landing

Apr 15, 2024 2 min read paid

Ed Yardeni

Dr Ed's Market Calls .... as reported in the financial press

Mar 30, 2024 1 min read

We are often asked about our track record in predicting the economy and financial markets. In response, we've compiled a handy chronological list of links to articles in the financial press that have reported on our predictions. We thank those of you have signed up for a full membership to our QuickTakes. You can find a discussion of our "current analysis" approach to forecasting in Dr.

Ed Yardeni

Fairy Godmother Of The Bond Market

Jan 2, 2024 2 min read paid

When Janet Yellen was Fed chair from 2014 to 2018, we often referred to her as the “Fairy Godmother of the Stock Market.” We noticed that stock prices tended to rally following her speeches and testimonies on monetary policy and the economy. She has been Treasury secretary since 2021. We may start calling her the “Fairy Godmother of the Bond Market.” That’s because the rally in the bond market

Ed Yardeni

Bonds Yields Down On Weak Goods Economy

Dec 27, 2023 1 min read paid

Bond yields continued to fall today on December's weak manufacturing regional surveys conducted by five of the 12 Federal Reserve district banks. Furthermore, on Tuesday, Mastercard SpendingPulse reported that retail sales during the holiday shopping season (from November 1 through December 24) were up just over 3% y/y. The increase was weaker excluding the 7.8% increase in restaurant sales. We conclude that the rolling recession for

Ed Yardeni

Beige Book Paints Beige Economic Picture

Nov 29, 2023 2 min read

The bond market liked today's Beige Book, the collection of regional surveys of economic activity conducted by each of the 12 Fed district banks. While Q3's real GDP growth was revised up to a red hot 5.2%, the latest survey from October 6 to November 17 was more like a cool beige color. Six of the 12 Fed banks reported slight declines in economic activity.

Ed Yardeni

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