Yellen’s Hawkish Pause

Last Week: As widely expected, the Fed held off hiking rates or altering monetary policy in any way last Wednesday. In what’s being deemed the “hawkish pause”, the Fed further sharpened the market’s focus on December as the mostly likely time for the next rate hike. The meeting take-away was that the Fed believes the […]

Fed on the High Wire

Last Week: After a relentless run since early August, short-term interest rates declined while longer term ones increased, driven by disappointing US retail sales and factory output data and speeches by Fed officials that failed to instill any belief in a near-term rate hike. Equities, Oil and Gold all declined, while the 10-year Treasury traded […]

Steady as She Goes

Last Week: Friday marked an end to relative market quiet as a global risk off theme suddenly took hold, driving the S&P 500 to sink 2.5% in the heaviest volume in two-months and the market fear gauge to jump the most since the BREXIT vote. Oil ended the week slightly higher while gold traded flat. […]

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Common Hedging Pitfalls and How to Avoid Them

Case Study #1, Refinancing a floating rate loan hedged with an interest rate swap A borrower has a loan maturing in 2 years and is worried term interest rates will be much higher when the bank loan matures.  There is a swap in place, which has a negative value.  There are two important points to […]

Goldilocks & The Fed

Last Week: Friday’s jobs data was the highlight of the week, coming in softer than expectations on all counts. However, the miss wasn’t too bad and the market quickly lifted Dec Fed hike expectations as it dashed any hope for September. The 151K increase in August payrolls was just above what many see as the […]