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Fed vs Treasury Tug of War to Dominate Rate Moves

Last Week: Interest rates were mixed, and equities were higher on the week as the economic fallout from the pandemic became clearer. The yield on the US 10-year Treasury traded within its well-worn yield range, bouncing a mere 7 basis points between its 0.70% peak seen mid-week and its 0.63% trough. 1-month LIBOR continued its […]

Negative Interest Rates for Dummies

From an emergency 100 basis-point Fed funds target rate cut, to restarting quantitative easing, to enacting an alphabet soup of targeted liquidity facilities, the Federal Reserve is employing everything at its disposal to ensure the financial system remains sound. While keeping credit flowing and encouraging consumers to spend are the Fed’s top priorities, there’s one […]

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Meet Me at Zero

Last Week: Interest rates and equities fell after a one-two punch from ongoing trade frictions and fresh signs of slowing global growth. The yield on the US 10-year Treasury note declined to 1.54% from 1.70% a week ago, its lowest level in three years, while 1-month LIBOR forged a similar path, falling to 2.17% from […]

GDP Data to Confirm Solid Recovery

Last Week: A week of limited data and events saw previous trends maintained; what data there was, generally had a positive tone. US equity markets hit and held at or near new highs, while the US dollar rallied, oil declined and gold traded flat. The 10-year Treasury traded mostly flat for the week to 1.5835%, […]

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Negative Interest Rates: Friend or Foe?

We’re all bombarded with news of the imposition of negative interest rates in Japan and in Europe, how it’s setting a historical precedence, why its happening and wonder if it’s possible in the US. While there’s a great deal of fear and misunderstanding around the idea that our beloved Federal Reserve could adopt a negative […]