"Have Central Bankers Become Helicopter Parents?" In this month’s Municipal Strategy Report we discuss the growing central bank focus on 'financial market stability,' and whether central banks may be moving off the range, over-immersing themselves in concerns better left to market forces.
"Yields to Remain Suppressed Even After the Fed Unwinds"
In this month’s Municipal Strategy we discuss the factors that will partially suppress any potential rise in interest rates as the Fed continues to taper. With the economy suffering from some degree of “secular stagnation,” the rise in interest rates relative to the increase in GDP will likely be less than in previous periods of increasing interest rates.
"Janet Yellen Charting Brave New Course With Changing Cast of Characters"
In this month’s Municipal Strategy we discuss the challenges facing Janet Yellen as she deals with a historic retreat from extreme monetary intervention, while facing divergence in global monetary policies, and copes with four new voters and three vacancies on the FOMC. Is she up to it? Yes she is — but that doesn’t mean that the market can’t get volatile anyway!
"What If They Threw a Tapering and Nobody Cared?"
In the March Municipal Strategy Report we discuss the box the Fed has placed themselves in by constructing their 6.5% unemployment rate and 2% inflation rate policy guidelines.
"Bad Weather Gives FOMC Flexibility to Manage Monetary Transition"
In this month's Municipal Strategy Report, we explore how lower Treasury market yields, partly the result of weather-related economic weakness, have given the Fed the ability to taper more rapidly, given the reduced concern about the impact on interest-rate sensitive sectors of the economy.
"Tapering Issue Begs Question: What Happened to 'Discounting'?" In November's Municipal Strategy Report, we discuss the odd logic of the Treasury market: given that the taper is viewed as a lock anyway, and there is little time value of money why doesn't the market just discount the tapering reality now and move yields on 10-year notes to somewhere north of 3.00%? Isn't this the way we were taught that markets work?