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Bonds Say Let The Rate Hikes Begin: 1Y Bills Sells At Highest Yield In 5 Years
The US Treasury sold $25 billion of one-year T-bills at an interest rate of 33bps yesterday, the highest since June 2010. It appears the short-end of the yield curve is increasingly pricing in 'liftoff' sooner rather than later (and the long-end is responding by rallying - lower in yield - as medium term growth expectations fade) but it raises significant questions about the economic trajectory after the hike (and the ebbing confidence in The Fed).
This makes sense, given the majority now forecast a rate hike in September...
Which raises the question - if everyone expects rates to go up 25bps in September and 1Y bills are at 33bps... is it one-and-done for The Fed as the market is pricing a return to economic weakness?
Charts: Bloomberg
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September would be good timing since October is looking like suck time for bonds and I want to watch the derivatives burn......
The bond market started raising rates in January on the 10-yr and is voting QE a failure.
The Fed has been acting the part of being the source of rising rates through its chatter.
Its just chatter.
For the first time ever, it actually is only going to be the tip.
im with bonds - let the rate hikes begin. i can't wait to watch oil trade with a 3-handle if/when they do & we can see how it was the fed who has orchistrated the manipulation of oil/gas prices the last 10 years in 1 tool that obliterated the middle class.
better off investing in coins...
to wit:
Russia issues USS Donald Cook commemorative coin!
http://www.politonline.ru/interpretation/22882621.html
In other news:
Venezuela takes drastic measure amid food crisis"CARACAS, Venezuela -- A food industry group said Monday that Venezuela's government has ordered companies to distribute food staples to a network of state-run supermarkets amid chronic shortages of basic goods.
Federal authorities ordered producers of milk, pasta, oil, rice, sugar and flour to supply between 30 percent and 100 percent of their products to the state stores, he Food Industry Chamber said."
http://www.cbsnews.com/news/venezuela-maduro-orders-food-distribution-st...
What Are Venezuelan Bankers Trying to Hide?"Venezuela’s Banking Association recently issued a brief statement making the following claims:
“Websites, social networks, or any other means that divulge an exchange rate different from that of the Central Bank of Venezuela or any other official entity are not a valid reference and are a misrepresentation.… We suggest avoiding that value to establish the exchange rate of the bolívar in relation to the US dollar or any other currency.…”
“The practice of fixing an exchange rate based on supposed parallel markets with petty cash operations that are not representative of the Venezuelan economy as a whole, and carried out in a non-transparent market, leads to a lot of speculation that generates profit for the few and losses for the majority.”
“Every day, non-official sources report volatile exchange rates, without any underlying rationality.… Venezuela’s Banking Association warns that this situation leads to an inflationary spiral generating shortages and poverty.”"
http://panampost.com/andrea-rondon/2015/07/21/what-are-venezuelan-banker...
lol rate hikes. Yeah right. Look, rates may rise but it will have to do with investor demand ie China et al, not the Fed.
The mkts will raise rates, the inwester demand in china couldn't raise a hot air ballon.
i dunno. the 10 year isn't doing anything. it's in the same range it's been in for the last few months.
If I were the recipient of copious amounts of free or cheap fiat, that I had held on reserve getting paid fractional taxpayer subsidized interest, I would welcome a token .25 hike. This should further strengthen the
dollar; consequently further depressing commodity prices, making debts more onerous(opening up the possibility of distressed asset purchases), and essentially giving me a bigger bang for my buck.
After the knee jerk reactions, things would stabilize, or the rate hike could (unlikely) be rescinded. Then I could be positioned for the business cycle to slowly heat up due to the fiat I just injected into the deflated
market, as it's velocity started to pick up. Wax on, wax off.
and aftern above scenario transpired, my wet dream would be QE-4! Then I'd trade up for the 175 ft. yacht.