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Media Archive

June 18, 2015
Some keys to better understand the Fed The headline and story below illustrate what many often get wrong about the Fed. The headline reads “Fed says U.S. economy strong enough to handle rate hike” yet this is precisely what Mrs. Yellen went to pains to say is not the case in the press conference yesterday. The data is not where it needs to be... read more
June 3, 2015
Output Gap Update and Discussion We have been highlighting the US output gap for many years to show that there is more slack (and disinflationary pressure) in the economy than is implied from the unemployment rate. This analysis has continually suggested a longer time before the Fed would need to raise rates to slow the economy than was discu... read more
May 6, 2015
The 30yr UST is incredibly oversold Applying a mainstream overbought/oversold indicator (the 14 day RSI) to the 30yr UST, it has not been this oversold since 4 days in early June 2007, 8 years ago, and a memorable peak in yields. In that period, the 30yr peaked on June 12th, 2007 at 5.36% (30yr yields have been lower every day since then). Over t... read more
May 1, 2015
The strangest couple of weeks we can remember in the Treasury market The 10yr UST has risen 25 basis points (bps) in the last two weeks all while economic indicators have deteriorated. There are many examples of short-term periods of Treasury yields rising despite weaker fundamentals, but there is always an accompanying... read more
April 27, 2015
Treasury Market Seasonality Seasonality in the Treasury market is far from a sure thing. The strongest consistent month of the year is August where 10yr UST rates have fallen 72% of the time (studying 1990 through 2014). 72% is not the 85% or 90% that would make it more comfortable to bet on, and as the worst counter example, rates rose in the 10y... read more
February 6, 2015
Jobs number good, everything else questionable The jobs number this morning was very good, but it must be viewed in the context of several bigger factors: 1. the rate of job growth belies how much further progress is needed before we can move beyond disinflation/deflation, 2. other indicators for the US economy have been weakenin... read more