The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude to what’s yet to come: a wave of longer-term debt sales that are seen driving bond yields even higher.
The risks for bond investors from next week’s Federal Reserve meeting go well beyond whether officials decide to raise interest rates again.
Two years after inflation surged, the Federal Reserve has made limited progress tamping it down. A coterie of investors in the bond market is betting not only that policymakers will win, but that they’re right in anticipating the era of low long-term interest rates will return.
For over a year, bond traders have been whipsawed by uncertainty about how high the Federal Reserve will push interest rates.
Bond-market titans BlackRock Inc., Pacific Investment Management Co. and Vanguard Group Inc. are warning that recent violent swings in US Treasuries are only the beginning of a new era of volatility that’s here to stay until central banks conquer inflation.
Looming behind market fears over the prospect of a historic US default is the less-discussed risk of what would follow a deal to resolve the debt-ceiling impasse.
When March’s bank failures ignited a historic bond rally, few, if any, made more money than Josh Barrickman. His army of funds gained roughly $26 billion, the equivalent of more than $1 billion in paper profits every single trading session.
Jarred by daily double-digit moves in Treasury yields, bond investors are bracing for at least another year of rocky trading, abandoning hopes that in 2023 the market would return to normality.
Markets have been trading as if the end of the world is at hand – but what most participants see, behind the recent financial turmoil and contagion fears, is a still-strong US economy, the MLIV Pulse survey shows.
The bond market is doubling down on the prospect of a US recession after Federal Reserve Chair Jerome Powell warned of a return to bigger interest-rate hikes to cool inflation and the economy.
A swift reassessment of how high the Federal Reserve will raise interest rates this year has rocked the bond market in recent weeks.
For the first time in nearly two decades, investors can earn more than 5% on some of the safest debt securities in the world. That’s competitive with riskier assets like the S&P 500 Index.
Traders wagering this week on the Federal Reserve lifting its benchmark interest rate to 6% are still aiming way too low, according to Dominique Dwor-Frecaut.
The US Treasury held steady its quarterly sales of longer-term debt, matching widespread expectations among bond dealers, given the standoff in Washington over expanding the government’s borrowing authority.
The Federal Reserve’s quantitative-tightening program risks being propelled toward an early end as US politicians bicker in Washington over raising the national debt limit, according to some economists and bond-market participants.
Federal Reserve officials are making a full-court-press effort to convince investors they won’t be slashing their benchmark interest rate before year’s end.
Economist Campbell Harvey has had a winning track record since he showed in his dissertation at the University of Chicago decades ago that the shape of the bond yield curve was linked to the path of US economic activity.
The world’s biggest bond market got the ammo it needed from a below-forecast consumer price figure to fully lock in a Federal Reserve downshift in their policy-rate tightening pace, though not enough to wave an all clear sign for Treasuries.
Federal Reserve Chair Jerome Powell has history on his side as he and colleagues split with Wall Street over how long interest rates will stay high in 2023.
Slowly but surely, bond haters are vanishing across Wall Street — even as fresh market havoc remains a distinct possibility next year if still-raging inflation forces the Federal Reserve to ramp up policy tightening anew.
Wall Street is finding a reason to keep plowing into the bond market, even with a Federal Reserve that’s still far from declaring victory in its war against inflation.
It’s not as if volatility markets have needed extra juice this year.
All bets appear to be off on how high yields can rise in the world’s biggest bond market.
Wall Street money managers looking to pile back into Treasuries after months of losses will have to contend with a Federal Reserve that stands ready to raise the stakes every step of the way.
Everywhere you turn, the biggest players in the $23.7 trillion US Treasuries market are in retreat.
Week by week, the bond-market crash just keeps getting worse and there’s no clear end in sight.
Bond traders are girding for the risk that Federal Reserve Chair Jerome Powell is ready, willing and able to plunge the US into recession to get the inflation bogey under control.
The specter of US interest rates at 4% or even higher is bringing into sharper focus the question of when and how investors should really get back into bonds after Treasury markets suffered one of their worst beatings in decades.
Investors who might be looking for the world’s biggest bond market to rally back soon from its worst losses in decades appear doomed to disappointment.
Some of the world’s biggest bond investors say the market is wrong to expect central banks to score a long-term win in the war against inflation.
For all the volatility whipsawing the US bond market, traders are showing increasing confidence that the alarm bells warning of a recession will only get louder.
It’s too soon to call an end to America’s worst bond-market collapse in at least half a century.
A wild year on Wall Street has traders fretting one of two extreme scenarios will engulf the $23 trillion Treasury market ahead: Either a fresh bond selloff thanks to red-hot inflation -- or a sustained rally on mounting recession risk that sends yields back toward historic lows.
With the Federal Reserve releasing minutes from its latest meeting on Wednesday, traders are looking for further details on the plans to let billions of dollars worth of bonds to mature each month without replacing them.
Like a supertanker, US debt-service costs only change course very slowly. But it’s happening now -- and from Washington’s point of view, the new direction is the wrong one: they’re heading up.
The Treasury Department said in a statement Wednesday that it will sell $103 billion of long-term securities at auctions next week -- down $7 billion from February. This marks the longest string of quarterly cuts since a 2014-2015 cycle. In a surprise for some dealers, it’s also trimming sales of two-year, three-year and five-year auctions in coming months.
It’s the next big market call that could enrich traders across Wall Street: The raging global energy crisis and ever-more hawkish central banks knock key economies into 1970s-style stagflation. It’s a long shot for now, but anxiety is building among money managers that this market scenario -- out-of-control inflation just as growth slumps -- will eventually come to pass, especially in Europe.
The U.S. bond market reeled further on Tuesday, extending Monday’s declines after Federal Reserve Chair Jerome Powell’s aggressive rate hike comments drove yields on short-dated Treasuries to one of their biggest daily jumps of the past decade.
The rush into Treasuries sparked by Russia’s war in Ukraine has exposed fresh signs of weakness in the world’s biggest bond market, adding to pressure on U.S. regulators to detail a reform plan.
The bond market is dialing back expectations for how quickly and steeply the Federal Reserve will raise interest rates as Russia’s war in Ukraine threatens to exert a drag on global economic growth.
Investors gauging the likely size of the Federal Reserve’s interest-rate hike in March and plans for shrinking a balance sheet now at a record $8.9 trillion will get fresh clues on Wednesday.
The spreading global bond rout is spurring a Wall Street debate on whether investors will demand to be paid for lending to the American government like they used to.
A rapid one-two punch of interest-rate hikes and balance-sheet reduction from the Federal Reserve risks unsettling bond and stock markets that have already taken a beating.
Bond traders suspect the Federal Reserve will quickly discover it’s being too ambitious with its newly hawkish stance.
Wall Street likes to warn that past performance doesn’t guarantee future results, but when it comes to the traditional 60/40 mix of stocks and bonds, it kind of has. Persistent inflation could bring that to an end.
The surge in U.S. inflation is sending some of the biggest names on Wall Street into rethink mode, forcing them to recalibrate strategies that depended on bonds as a shock absorber against equity downturns.
As Mark Twain might have put it, the demise of debt’s value within the long-favored 60-40 stock-bond diversified portfolios is greatly exaggerated -- when you adjust for risk.
After already registering the worst monthly losses in almost a year so far in September, little relief appears in sight for investors adhering to the 60/40 stock-bond portfolio strategy.
The imminent return of the U.S. debt ceiling is causing angst for money-market traders once again.
Long-term Treasury rates tumbled to the lowest levels in months on Monday as the spread of the delta coronavirus variant called into question optimistic assumptions about economic recovery, also touching off a global stock market slump.
