Despite the recent legislative passage of a 10-year infrastructure investment plan, Congress and the Biden administration are no closer to an agreement on lifting the debt ceiling. … READ MORE >
yield curve
Will yields rise due to increased issuance of Treasury bonds? Let’s get the elephant out of the room!
Apprehension expressed by economic and financial pundits about potential runaway inflation and higher interest rates in the wake of the U.S. Treasury’s recent issuance of bonds is high. Our assessment of both the economic and policy paths strongly implies hat these worries will not become actualized in the near term. … READ MORE >
How the Fed responds to economic downturns
Since the 1970s, the Federal Reserve has relied on manipulating expectations of short-term interest rates through cuts in its overnight policy rate in response to economic and manufacturing slowdowns. … READ MORE >
The Fed walked a tightrope in cutting rates, and succeeded
The Fed’s careful balancing act of making insurance cuts to guard against global economic headwinds and normalize the yield curve without committing to extended cuts seems to have now gained acceptance with the markets. The entire yield curve has shifted lower since the July meeting because of the three rate cuts made this year. … READ MORE >
Low treasury rate is a boost for home builders, neutral for commercial real estate
Bonds have been declining in recent weeks following a 25-basis-point rate cut from the Federal Reserve and expectations of further cuts amid rising concerns over an impending recession. Recession concerns were escalated by the inversion of the U.S. and U.K. two- and 10-year yield curves and the fall of 30-year Treasury yields to 2.07%, a record low. While this trend in the bond market will likely drive down the 30-year fixed mortgage rate and translate to more purchasing power for home buyers, it will do little to juice the market for commercial real estate. … READ MORE >
Real negative yields signal business cycle nearing an end
The increasing probability that the U.S.-China trade and financial war will be a permanent feature of the global economic landscape is the catalyst for the inversion of the two-year-10-year Treasury yield curve on Wednesday. This inversion of that portion of the curve is the first since June 2007, which marked the start of the Great Recession. … READ MORE >
RSM’s Joe Brusuelas talks GDP and economic outlook with Bloomberg radio
Despite a slowing economy, RSM Chief Economist Joe Brusuelas tells Bloomberg radio that “a recession is just not in the cards this year” unless the administration or the Federal Reserve “makes a major mistake.” … READ MORE >