Discover and read the best of Twitter Threads about #Rates

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🚨Worth studying: 👇
"The Anatomy of the Bond Market Turbulence of 1994" - Bank for International Settlements

link in thread below. 🧵

#banks #riskparity #assetallocation #risk #riskmanagement #rates #us10y #bonds

1/ ImageImageImage
2/

Link to the paper from Bank of International Settlements

#banks #riskparity #assetallocation #risk #riskmanagement #rates #us10y #bonds

bis.org/publ/work32.pdf
Read 8 tweets
As was widely expected, the @federalreserve’s Federal Open Market Committee raised the target range for the Federal Funds #policy rate by 50 basis points (bps), to between 0.75% and 1.0%, and announced the start of #runoff of the central bank’s balance sheet.
As previously suggested by the #Fed’s March minutes, the pace of runoff was confirmed today as $95 billion/month ($60 billion in U.S. #Treasuries and $35 billion in Agency #MBS, with a three-month phase-in period.
Also as expected, the statement reiterated that the #FOMC “anticipates that ongoing increases in the target range will be appropriate,” underscoring the seriousness of #Fed policymakers in getting #inflation and inflation expectations under control.
Read 16 tweets
A significant #bond #buying opportunity is approaching.
As bond yields surge, history and #techncial analysis suggest that we should look at bonds for both #capital appreciation and a #risk hedge.
realinvestmentadvice.com/surge-in-bond-…
In Dec 2018, we wrote why Jeff Gundlach was likely incorrect about 6% yields.
“Rates are at levels that historically led to some sort of event either economic, financial, or both, When that occurs, rates will go to 1.5% and closer to Zero.“
We got to 0.5%
realinvestmentadvice.com/surge-in-bond-…
The surge in 2-year #bond #yields is unprecedented. Historically, such a surge in short-term yields coincides with either #recessions or #market events. With yields now 4-std deviations above its 52-week moving average, such has denoted peaks previously.
realinvestmentadvice.com/surge-in-bond-…
Read 6 tweets
DoubleLine founder and CEO Jeffrey Gundlach presents "Convoy" Tuesday at 1:15pm PT.

Stay tuned here for live updates!

#macro #markets #inflation #geopolitics #Fed #Canada #RussiaUkraine #rates #recession #stocks #bonds #commodities
Jeffrey Gundlach: "Convoy" has two meanings. Inspired by Canadian truckers go angry enough to take things in their own hands.
Jeffrey Gundlach: The other meaning is the runaway convoy of the commodity market.
Read 61 tweets
Like many others, I have been observing the #ScrumMaster market over the past 12-13 years. That said, the qualification possibilities have grown dramatically. The general skill of a Scrum Master too. But there is something wrong.
Average day #rates for Scrum Masters rather went down, instead of up. Large companies claim, they can get a great Scrum Master at EUR 500,- to 600,- (Western European ranges). And they miss one point: such a person would be plain stupid joining them!
Let's be frank. The first Scrum Master in the world was an experienced manager. The idea for this role was never a simple one. Bad implementations made it simple (like becoming a team secretary). But to me a Scrum Master is a skilled #organizational #developer.
Read 5 tweets
#FX/#Rates thru 2016/18 episodes of 'Equity Tantrum' on hawkish Fed: Takeaways
▪️ Short USDJPY best FX trade in both periods
▪️ Short AUDJPY even better
▪️ Short EUR/Long DXY bad idea for risk-off
▪️ Gold/Silver good value here
▪️ Long USDEM not rewarding enuf
▪️ Bonds rally 40bp
Dec 2018 Recap:
S&P -11.3% (30 Nov'18 to 3 Jan'19)
2y UST -41bp, 2.78=>2.37
10y UST -43bp, 2.98=>2.55
DXY -1.0%
Oil/WTI +0.30%
BCOM -6.2%
VIX 18=>25 (36 high)
HY OAS +119bp

But Dec'18 episode was late in hiking cycle=>had enough room for a 40bp bond rally. Lets look at 2016

2/7
Jan 2016 Recap:
S&P -10.5% (31 Dec'15 to 11 Feb'16)
2y UST -40bp, 1.05=>0.65
10y UST -61bp, 2.26=>1.65
DXY -3.1%
Oil/WTI -13.5%
BCOM -5.85%
VIX 18=>28 (32 high)
HY OAS +179bp

DXY ⬇️ on higher EUR JPY & CHF
Strong bond rally at start of hiking cycle
2/10 flatter but 5/30 steeper
Read 7 tweets
DoubleLine founder and CEO Jeffrey Gundlach presents:

Just Markets 2022 - I Feel Young Again

Today at 1:15pm PT, register here: event.webcasts.com/starthere.jsp?…

#macro #markets #stocks #FX #bonds #commodities #rates #inflation #Fed #QE #bitcoin

Live recap thread⬇️
Jeffrey Gundlach: 2021 might end up running 7% year on the CPI

#inflation #QE #Powell #fed #hikes #rates
Jeffrey Gundlach: Low interest rates coupled with inflation generating negative interest rate.

#JustMarkets2022 #CPI #QE #Fed
Read 48 tweets
As expected, the @federalreserve’s Federal Open Market Committee continued to discuss its plans to reduce, or #taper, the pace of its #AssetPurchase program at yesterday’s meeting.
While the details of this discussion were fairly sparse, the Committee statement did state that: “If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.”
Further, at the recent #Fed conference in Jackson Hole, Wyo., and at the press conference, Fed #ChairPowell emphasized that both he and most Committee participants now consider the test of “substantial further progress” toward the #inflation mandate to be largely satisfied.
Read 10 tweets
Great conversation with @MerrillLynch CIO Chris Hyzy, as part of their #MerrillPerspectives event. Some of the topics we discuss follow and the full conversation can be accessed here: ml.com/2021-midyear-e…
On the #market lessons stemming from the pandemic, I suggested that- stepping back- while a lot has been thrown at the #economy and markets over the past 30 years, in every case the #policy response has been critical to evaluate in judging the ultimate impact: policy matters!
That said, we think there is an overestimation of the importance of exceedingly low #policy rate levels to the recovery but maintaining the stability and #liquidity of the financing #markets is critical, particularly at the top end of the capital stack.
Read 10 tweets
Is there an incoming policy error by the Federal Reserve? $DXY #FederalReserve #Dollar #Policy #Fed

Thread 1/
Over the past several weeks, we have seen significant Central Bank actions globally. This reflects a market flush with cash and a desire by the Federal Reserve to hold short-term rates positive. 2/
Mid-June 2021 FOMC Summary:
1. Unchanged rate and QE policy
2. Reverse Repo rate increase to 5bps
3. IOER increase to 15 bps
4. Dot plot showing rate hikes sooner than expected
3/
Read 17 tweets
Me reading the revisions on the last new home sales print 🇺🇸💪🏽📈🔥
Remember when people were worried about a W recovery 😏🤣, I don’t think this was it. Honestly, this last report was so good I want to see if it sticks because the new home sales report can be wild month to month—however, those revisions 🔥.
Read 4 tweets
While our February 18th monthly client call argument for rising #RealRates appeared prescient, we were surprised by the magnitude of last week’s #move and would expect a more benign evolution toward #equilibrium going forward.
Taking a stab at periodizing the past year: 1) in Feb/Mar 2020 the Covid crisis was priced into #markets, real #rates spiked higher, #inflation breakevens collapsed and #investors scrambled to raise #cash as the #SPX experienced its fastest 30% drawdown in history.
Then, 2) from Apr through Oct 2020 we witnessed the #market impact of monumental #monetary and #fiscal policy responses to the #crisis, as policymakers successfully sought to force #real rates down and restore #inflation expectations.
Read 10 tweets
Lumber Prices Are Soaring. Why Are Tree Growers Miserable?
Sawmill operators harvest gains while Southern landowners struggle with tree surplus; ‘I’m not making anything’

wsj.com/articles/lumbe…
Mortgage Companies Want In on the IPO Boom. Investors Aren’t Convinced. 

Initial public offerings for mortgage lenders haven’t worked out the way all the companies were hoping
wsj.com/articles/mortg… #realestate #rates #home #housing #credit
Read 11 tweets
I have some friends coming to visit so I have a lot to do today. Im not panicking over rising #rates.

Here's why. Some charts of what happened to #gold miners during the biggest rate rise in the last 50yrs.

Banner Resources. 34c in 1978 to $16 in 1980. A 4,600% gain in 2 yrs.
Carolin Mines. From a low of 2.20 in 1978, to a high of 56.5 in 1980. This occured while 10 yr rates nearly doubled from 7% to 13% in the same time frame.
Silver Stack Mines. A low of 1.30 in 1978, to a high of $36 by 1980.
Read 11 tweets
Recently, Dr. Shiller suggested that #valuations really aren't that high once you fall in the #Fed trap of using #earnings #yields and #low #rates to justify it. The problem is it is a #rationalization to justify overpaying for #assets.
realinvestmentadvice.com/shiller-ecy-ju…
The main problem in using low-interest rates as a rationalization to overpay for assets is that you have to also discount #future #cashflows for lower inflation and rates as well.
realinvestmentadvice.com/shiller-ecy-ju…
"As low-interest rates went lower, the dynamic changed from using debt productively to using debt for non-productive purposes such as dividend issuance, share buybacks, and, in some cases, offsetting negative cash flows."
realinvestmentadvice.com/shiller-ecy-ju…
Read 6 tweets
The #FOMC today began the process of “operationalizing” the average inflation targeting framework that Chair #Powell first laid out in his Jackson Hole, WY, Economic Policy Conference speech: including new guidance on how long #policy rates can be expected to remain near zero.
Specifically, policy #rates will remain at current levels “until #labor market conditions have reached levels consistent with the Committee's assessments of maximum #employment and #inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.”
Still, we’re skeptical about the achievability of this #inflation goal when the #disinflationary influences of technological #innovation and the #demographic trend of #population aging arguably hold a greater impact on the rate of inflation than central bank #policy does.
Read 6 tweets
The #deficit #myth #deficitmyth by @StephanieKelton #MMT modern monetary theory
Myth N. 1: The #state should budget like a #household
#RealityCheck : unlike a household, a #SovereignNation, which owns its national #centralbank, issues the #currency it spends
Myth N. 2: #deficit is evidence of #overspending
#RealityCheck: look to #inflation for evidence of over spending
The purpose of #taxes is not to pay for #government expenditures but to help rebalancing the #wealth distribution #MMT
Read 56 tweets
The @federalreserve’s #JacksonHole Policy Symposium has typically been thought of as an event of #academic contemplation, rather than of active #policy innovation, but 2020’s event proved to be the exception to the rule.
That’s because #Fed #ChairPowell surprised many by introducing the #FOMC’s Statement on Longer-Run Goals and Monetary Policy Strategy, which was not expected until later in the year.
In many respects, the Strategy statement represents a mirror image to the #Fed’s stance more than a generation ago, in August 1979, when Chair Paul #Volcker took over leadership of the central bank…
Read 7 tweets
We’ve seen near a 20-basis point backup in long #bond #rates since the beginning of the month, which has come alongside many #economic data prints that have surprised to the upside, as well as firmer than expected #inflation. Image
One question to consider, then, is how much of this #economic improvement is due to restocking dynamics versus more permanent/structural gains to #economic activity? The answer to that is likely to become more apparent in the months ahead.
We foresee a gradually rising range for long-end #yields in the year’s second half, as @USTreasury issuance will remain robust. Image
Read 5 tweets
Today’s #JobsReport, which witnessed nearly 1.8 million #jobs gained in the month of July, was stronger than many anticipated, yet it also displayed some signs of slowdown in #labor #market improvement.
The report shows that the pace of #job-gain acceleration has now slowed markedly, and it is our best guess that the rapid rate of return to #work will now exhibit a very deliberate pace of rebound from here.
That’s particularly the case for some sectors, such as #retail and #leisure #hospitality, where the slowing in improvement was even more pronounced.
Read 7 tweets
#Thread
#Article370 #NayaKashmir

#Kashmir post #Abrogation of #Article370

A New Era Unfolds in #Jammu & #Kashmir post #Article370. A #thread #Investment #Development & #Employment. Removal on Article 370 encouraged Industries & investment spurring growth & employment
@CestMoiz Image
#Kashmir post #Abrogation of #Article370

#Education & #Health.

20000 #students from J&K goes outside to study.
#Patients forced to travel Delhi or Mumbai for special treatments. Large private investment in #health & education sector will change this narrative.
(1/n) Image
#Kashmir post #Abrogation of #Article370

New Dawn for #Youth

While the children of elite studied abroad, poors in J&K were denied decent education facilities. Equal opportunities will be ensured with focus on #education #industrialization & #tourism
@neeraj_rajput
(2/n) ImageImage
Read 13 tweets
#Thread (1/13)

#Kashmir post #Abrogation of #Article370

Big Boost for #Tourism.
The toursim potential of J&K is immense. There was no major national or global player in tourism sector earlier. Investment in tourist infrastructure like hotels will increase tourist arrivals.
#Thread (2/13)

#Kashmir post #Abrogation of #Article370

#Education & #Health.

20000 #students from J&K goes outside to study.
#Patients forced to travel Delhi or Mumbai for special treatments. Large private investment in #health & education sector will change this narrative.
#Thread (3/13)

#Kashmir post #Abrogation of #Article370

Benefits to #Land #Owners.

#Land #rates remained stagnant in J&K due to restrictions of land transfer. Now lande owner who wishes to sell his land can #benefit from increased prices.
Read 18 tweets
#RBI cut by 40bps each of these👇
#Repo rate to 4%
#ReverseRepo to 3.35%
#BankRate to 4.25%

Decision was reached after 5:1 vote,with #ChetanGhate,lone voice calling for 25 bps cut

#MPC meet was held ahead of schedule from 3rd-5th,June

#EMI #moratoroum extended by 3 more months
Moratorium extension till 31st August 2020,is both timely &reflective of @narendramodi govt's alacrity--Big relief to #MiddleClass

Measure to convert #moratorium interest payment into #TermLoan payable in FY21,is helpful

This will reduce #NPAs &stress on banks' balance sheets
#RBI's cut in #Repo will reduce cost of funds&extension of #moratorium will be supportive of financial stability;#Rates across #YieldCurve will move lower from current levels

Fall in #ReverseRepo rate will disincentivise banks from #hoarding #liquidity&coax them to lend

#Covid
Read 10 tweets
A very interesting @WSJ article over the weekend regarding how #European governments that have railed against U.S. big #tech companies over privacy concerns are now embracing these same companies’ #coronavirus contact tracing #technologies.
This gets to a longtime argument we’ve made about @ecb policy and the role of #innovation in spurring greater #growth in the region: blackrockblog.com/2019/07/25/bol…
Essentially, it has long been our view that negative interest rates (#NIRP) are counterproductive and what’s needed is #equity investment in innovation, #technology, and 21st century #infrastructure.
Read 8 tweets

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