Bond Market

Powell Is Still Calling The Shots

Nov 9, 2023 2 min read paid

The bid-to-cover ratio is the dollar value of bids compared with the dollar value of debt offered. Falling bid-to-cover ratios indicate less robust interest from investors. Yields climbed today after a weak auction of $24 billion in 30-year Treasuries with demand for the debt at 2.24 times the bonds on sale (chart). That helped to push stock prices lower today, snapping the longest winning streaks for the Nasdaq and

Ed Yardeni

Flood of US Treasury Securities

Oct 30, 2023 2 min read paid

Ed Yardeni

Strikes and Shutdowns and Bond Yields, Oh My!

Sep 25, 2023 2 min read paid

The stock market held up surprisingly well today under the circumstances: The UAW strike is shutting down more auto production. The federal government is heading toward a shutdown on October 1. Moody’s Investors Service warned in a note today that a US government shutdown would be a “credit negative” event for the country. The 10-year Treasury yield surged by more than 10bps to 4.55%, the highest since 2007

Ed Yardeni

Bond Yield Climbs to 4.50% As Yield Curve Is Disinverting.

Sep 21, 2023 2 min read paid

The Fed's hawkish pause, announced on Wednesday afternoon, has lifted the 10-year US Treasury yield to 4.50% this evening. We think it might consolidate here for a while consistent with our view that the yield has normalized back to where it was from 2003-2007, i.e., before the Great Financial Crisis (GFC). Back then, the 10-year TIPS yield and the expected inflation spread hovered around 2.00%

Ed Yardeni

FOMC's Message: High For Longer

Sep 20, 2023 2 min read paid

The FOMC’s latest Summary of Economic Projections (SEP) released today shows that the median forecast of the federal funds rate (FFR) for 2023 is 5.6%, unchanged from June’s SEP (table). The 2024 forecast was raised to 5.1% from 4.6%. As we expected, the FOMC’s message is that the FFR might be lowered next year by 50bps rather than 100bps. The latest SEP shows headline

Ed Yardeni

Canada's Inflation Spooks Bonds Around the World

Sep 19, 2023 2 min read paid

Canada's CPI inflation rate in August jumped to 4.0% from 3.3% in July on higher gasoline prices. Shelter prices also jumped by 6.0% after a 5.1% advance in July, pushed up in part by rising rents and higher interest rates. The closely watched trimmed-mean CPI rate unexpectedly rebounded to 3.9%, well above expectations of 3.5%. The Canadian 10-year government bond yield jumped

Ed Yardeni

Market Call: Waiting For The Verdict

Sep 10, 2023 2 min read paid

The S&P 500 has been marking time recently around its 50-day moving average waiting for a verdict (chart). The jury is no longer debating whether the economy is falling into a recession. The issue has been resolved. The economy is growing. But now the debate is whether it is growing too strongly so that inflation stops moderating. Or will it slow down so that inflation can continue to

Ed Yardeni

Bond Prices Go Drip, Drip, Drip

Aug 17, 2023 2 min read paid

The 10-year US Treasury bond yield rose above 4.00% at the beginning of August on better-than-expected economic data. It rose above last year's peak of 4.25% today, trading most recently at 4.32%, following the release yesterday of July's FOMC minutes, which strongly suggested that solid economic growth might keep inflation above the Fed's 2.0% target unless the Fed continues to

Ed Yardeni

Bond Vigilantes Running Into Some Resistance

Aug 14, 2023 2 min read paid

The 10-year US Treasury bond yield continues to run into resistance around 4.25%, which was last year's high (chart). The bond bears led by the Bond Vigilantes would like to see the yield rise well above that level to demonstrate that they are unhappy with the government's profligate fiscal policies. The bond bulls--including us, for now--see the current level as an attractive one if inflation

Ed Yardeni

Uncle Sam Downgrade Raises Caution Flag

Aug 2, 2023 2 min read paid

In yesterday's QT, we noted that the 10-year Treasury bond yield was back just over 4.00% and that this might "weigh on stock valuations, especially of the MegaCap-8." That's what happened today. Yesterday, after the close, Fitch Ratings downgraded US government debt from AAA to AA+ for all the reasons that have been concerning in the bond market for years. The US federal

Ed Yardeni

Sunny Day

Jul 10, 2023 1 min read paid

Today was a sunny day for stocks and bonds following a few stormy days. That's even though two Federal Reserve district bank presidents (Daly & Mester) said that inflation remains too high and more rate hikes will probably be necessary to bring it down. On the other hand, another one of them (Bostic) said the Fed's "policy right now is clearly in the restrictive territory.

Ed Yardeni

What's Driving Bond Yields?

May 22, 2023 2 min read paid

Two of our favorite technical indicators for the 10-year Treasury bond yield are currently bullish. The yield tends to be highly correlated with the ratio of the nearby futures prices of copper to gold (chart). The ratio suggests that the yield, which is currently 3.70%, should be much closer to 2.00%. We view the ratio as a risk-on versus a risk-off indicator. The Citigroup Economic Surprise Index (CESI)

Ed Yardeni

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