Tag: Bryce Doty

Treasuries in a ‘Bubble’

I would think most bond investors see treasuries as in a bubble. Even the lowest inflation predictions are higher than the current 1.28% yield on the 10-year maturity U.S. Treasury, and yet, the bubble is likely to persist until both 1) the Fed stops injecting $120 billion into the financial system and 2) the savings… Read more »

Huge Miss on Jobs

Only 266,000 jobs were created last month instead of the million expected for the second largest miss in history (March 2020 being the worst). The unemployment rate actually rose from 6.0% to 6.1% instead of declining to 5.8% as expected. However, labor force participation inched up from 61.5% to 61.7% and the underemployment rate actually… Read more »

Comments on Today’s Economic Data

We are transitioning from “expectations” of a strong economic impact from the combinations of a high savings rate and pent up consumer demand to the incredible reality of just how powerful the rebound is. Given the significant rebound in retail sales, it makes sense that the Empire Manufacturing and Philly Fed Business Outlook crushed the… Read more »

Vaccines and the Fed

We expect the Federal Reserve to stay very dovish. Despite the promise of a better tomorrow with vaccines rapidly being deployed across the country, the Fed will continue to do everything possible to support financial markets. We expect them to err on the side of waiting too long to pull back on bond purchases and… Read more »

Employment Stalls

Spreading shutdowns following the spreading virus caused employment gains to take a pause. While normally 245,000 jobs in November would be something to cheer about, expectations were for 460,000 jobs making today’s data a disappointment. Next month we could have job losses as shutdowns and growing fatalities continue to take its toll on the country…. Read more »

COVID-19 Fatigue Cause Analysts to Be Steadfastly Pessimistic

The jobs report continues a string of better than expected economic data. 638k new jobs were reported for October while only 580k were expected. The unemployment “beat” was even better, with a rate of 6.9% versus an expectation of 7.6%. Americans continue to find creative ways to do business while COVID-19 fatigue cause analysts to… Read more »

More Job Losses Are More Lives Saved

The mind boggling loss of jobs last month was not caused by an economy out over its skis in need of a correction, but is a measure of the country’s resolve to meaningfully damage the rapid spread of COVID-19. More job losses are more lives saved. Losing 20 million jobs in a month is a… Read more »

Will the Coronavirus Make the Fed Sick?

As seen in Bond Buyer. Continued uncertainty regarding the life cycle of the new coronavirus contagion is flattening the yield as a flight to quality is driving down treasury yields.  With the Fed expected to stay on hold this week, shorter maturity bond yields have declined less than long term maturities. So this week the… Read more »

Repo Crisis Continues

The Fed is still supplying an incredible $200 billion of short term financing to repo markets.  The Fed plans on printing money in order to buy nearly $50 billion in T-Bills a month in a misguided attempt to end the emergency injections of cash. The Fed already printed so much money that banks have $1.3… Read more »

Fed Can’t Fix Repo Market by Printing Money

Financial light tunnel

bondbonAs seen in Bond Buyer. On Tuesday, the New York Fed provided only $30 billion of 14 day financing despite more than $60 billion in demand.  The New York Fed also provided $75 billion in overnight lending that came close to meeting the $80 billion in demand.  These actions are helping to bring overnight financing… Read more »