The spike in bond yields presents an opportunity for fixed income investors to earn capital gains and diversify portfolios.
The sovereign credit rating cut is unlikely to significantly change views toward U.S. Treasuries, but questions about debt sustainability may grow louder over time.
As investors seek to pinpoint market expectations for Federal Reserve policy, it’s critical to consider not just rate projections and derivatives pricing, but the degree of uncertainty and distribution of outcomes.
We believe the Fed’s mortgage purchase program is helping to bolster economic activity, and accomplishing more than Treasury purchases alone.
The Fed has moved aggressively to stabilize core assets, including mortgages. Yet several market indicators are still concerning.
The Fed could give the economy a powerful boost by maintaining the mix of assets on its balance sheet.
The Fed has another lever to pull to ease monetary policy, one that could increase savings rates and create more disposable income.