As you’ve noticed, the website is back up and running. My apologies for last week’s delay, our SSL certificate had expired and getting it renewed turned out to be a bit more complicated than expected. We’re all set now, so let’s dive right in and get caught up on the latest market action.
Article Category: Yield Curve
The fickle and herd-like nature of the financial markets is on clear display right now, as conversations about the yield curve again take center stage. Last week, the 10-year note yield momentarily dipped below that of the 2-year yield (it did not close below that mark) and this has set off a frenzy of commentary that in my opinion, is completely misplaced.
Interest rates have been the primary focus of investors lately, and for good reason. A glance at the chart of the 10-year Treasury note yield below shows that while rates have been steadily declining for nearly a year, that move accelerated sharply during the last two weeks.
In last week’s commentary I mentioned that the Treasury does a biannual review on the currency practices of foreign governments. In five such reviews under the Trump administration, the Treasury department has declined to label China as a currency manipulator. That all changed yesterday.
As you most likely know, last Friday’s strong jobs report – which showed 224,000 jobs created in June – has caused a bit of unease across the market. With investors now salivating over the prospect of a rate cut, robust economic data has come to be viewed with disdain. After all, who wants a strong economy when we can have asset-price juicing stimulus instead?