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☆ Stubborn inflation means the Fed will be cutting rates less than the market thought
▼ + stars: | 2024-02-13 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

If nothing else, the January inflation report released Tuesday finally appears to have convinced markets that Federal Reserve officials weren't kidding around when they said they will take a deliberate approach to cutting interest rates this year. Following the consumer price index report showing the year-over-year reading well ahead of the Fed's desired inflation goal, markets recalibrated their monetary policy expectations. The Fed "faces a challenging task in balancing economic growth and employment while trying to control inflation," he added. Indeed, the narrative of the Fed being able to start cutting early, and moving rapidly through the year, was all but dead Tuesday. The January CPI report is a "setback for the Fed and makes a May rate cut unlikely.

Persons: Ditto, —, it's, Sung Won Sohn, Dow, Jerome Powell, Jason Pride, there's, Powell, Matthew Ryan, Krishna Guha, Guha Organizations: Federal Reserve, CME, Labor, CPI, Loyola Marymount University, SS Economics, Dow Jones, US2Y, CBS, Bank of America, Citigroup, Fed, Evercore ISI

☆ Here’s where billionaire investor Jeffrey Gundlach sees income opportunities as recession risk looms
▼ + stars: | 2023-11-02 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +2 min

Jeffrey Gundlach sees an economic downturn on the horizon, but he also sees an opportunity emerging for income investors. Gundlach, founder of DoubleLine Capital, sees interest rates falling as the U.S. economy moves into a recession in the first part of 2024 . However, investors seeking income may do well to step out a little further on the yield curve, rather than hiding in 6-month Treasury bills and cash-like investments. Investors in holdings that are too short-dated may find themselves exposed to reinvestment risk as rates decline. He said investors could buy "the entire yield curve at this point."

Persons: Jeffrey Gundlach, Gundlach, Stanley Druckenmiller's Organizations: DoubleLine Locations: U.S

Since the central bank kicked off its policy-tightening campaign in March 2022 — boosting interest rates 11 times — income investors have benefited from higher yields on Treasurys, money market funds and certificates of deposit. "From here, even if rates go higher you are locking in some really good income." If you're willing to sacrifice a little bit of liquidity, select banks will pay even higher yields. Drivers of those increases include higher-for-longer interest rates, and competition from Treasurys and money market funds, Graseck added. Money market funds Rates on money market funds have also jumped substantially since the rate-hiking campaign started.

Persons: Greg McBride, reinvest, US2Y, Treasurys, Sameer Samana, Sallie Mae, Morgan Stanley's Betsy Graseck, Graseck, — CNBC's Michael Bloom, Nick Wells Organizations: Federal Reserve, Fed, Treasury, Wells, Wells Fargo Investment Institute, Savings, Synchrony, Bread Financial, Investment Company Locations: maturities, Wells Fargo

☆ These safe assets offer yields exceeding 5%. Why investors shouldn’t lean too heavily on them
▼ + stars: | 2023-09-11 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +4 min

The Fed's rate-hiking campaign gave investors an opportunity they haven't seen in years: Risk-free returns are finally interesting. Six-month Treasurys are yielding 5.5%, while a bevy of money market funds are offering 7-day yields exceeding 5%, according to Crane Data . However, at some point, rates will come down — and investors hiding in short-term, high-yielding assets could find themselves with no place to go. That means investors could be left with few places to go for attractive yields in a lower rate environment as their shorter-term assets mature — known as reinvestment risk. The benefit of laddering when rates are high is that the longer-dated bonds will have already locked in the higher yields.

Persons: There's, we've, Crystal Cox, Matthew McKay, McKay, Jerrod Pearce, Pearce, Wealthspire's Cox Organizations: Federal Reserve, Data, Wealthspire Advisors, Briaud Financial, CFP, Creative Planning

☆ Stick with Treasurys even after Fitch downgrades U.S., UBS says
▼ + stars: | 2023-08-02 | by ( Brian Evans | ) www.cnbc.com time to read: +2 min

Government bonds are still a sound investment, according to UBS. Fitch attributed the downgrade Tuesday to an "erosion of governance," referring to political standoffs around the debt limit, as well as growing debt levels. The firm expects government debt to reach 118.4% of gross domestic product by 2025. US10Y US2Y YTD line U.S. 2 year and 10 year yields Bond yields move opposite to their prices. She noted that the added benefit of having U.S. Treasurys is they offer the potential for capital appreciation if investors become concerned about slowing growth.

Persons: Fitch, Marcelli, — CNBC's Michael Bloom Organizations: UBS, ., AAA, UBS Global Wealth Management, Treasury, Federal Locations: Americas

☆ This bank just raised yields on its 2-year CD — here’s where you can lock in 5%
▼ + stars: | 2023-07-28 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +1 min

Since the central bank embarked on its rate-hiking campaign in March 2022, yields on fixed income instruments, ranging from Treasurys to money market funds and bank deposit products, have become more attractive. Some strategists have suggested income-focused investors begin locking in higher rates so they can keep earning good yields once the central bank shifts gears. Capital One recently pushed up the annual percentage yield on its 2-year CD 5 basis points to 4.35%. As a result, a handful of institutions now offer yields of 5% or close to it for 2-year CDs. See below for a table of 2-year CDs.

Persons: Michael Kaye, Ally Financial, — CNBC's Michael Bloom Organizations: Federal Reserve, Financial, Delta Community Credit Union Locations: Wells

With the second half of the year now underway, investors may want to take another look at their fixed income portfolio. High yields have been a boon to income investors, as the Federal Reserve increased interest rates over the past year. "For more of our clients, we're looking to have the fixed income of the portfolio provide lower correlation and income," he said. Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors, generally prefers securitized assets such as asset-backed and mortgage-backed securities. "You can't think of high yield bonds in the same thought as Treasurys," said Cox of eToro.

Persons: James Franke, Sonal Desai, She's, We're, It's, Desai, Franke, Rothschild, Callie Cox, Greg Wilensky, Janus Henderson, Cox Organizations: Federal Reserve, Treasury, Rothschild Investment, Franklin, Janus, Janus Henderson Investors Locations: Treasurys, U.S, eToro

☆ Get a risk-free 5% return as the 2-year Treasury yield hits a 16-year high. Here’s how to buy one
▼ + stars: | 2023-07-06 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +3 min

Income-seeking investors are primed to pick up a risk-free return exceeding 5% now that the yield on the 2-year Treasury has spiked to highs last seen in 2007. Indeed, the yield on the 2-year Treasury – which is especially sensitive to Fed policy – leapt to 5.12%, its highest level since June 15, 2007. The rate on the 10-year Treasury also jumped over 4% at its highest point of the day. How to buy in To purchase Treasurys directly from the U.S. government, you can set up an account on TreasuryDirect.gov . If inflation outpaces the yield you're earning, it could erode the real rate of return earned on these notes.

Persons: Dow Jones, –, Luis Alvarado, — CNBC's Michelle Fox, Nick Wells Organizations: Treasury, Traders, Private, Federal Reserve, U.S ., . Locations: Wells Fargo, Treasurys

☆ Markets and the economy survived a tough first quarter, but it's not going to get any easier
▼ + stars: | 2023-04-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +8 min

Despite peaks and valleys, stocks closed the first quarter on an up note, with the S & P 500 rallying more than 7% and the tech-fueled Nasdaq soaring about 16%. .SPX .DJI YTD line S & P 500 gains so far in 2023 Indeed, the market has lived through a lifetime of scary headlines in the first three months of 2023. Despite repeated protestations from Fed officials that they are taking the higher-for-longer approach on interest rates, markets still expect cuts. AAPL .SPX YTD mountain Apple compared to the S & P 500 Only five of the 11 S & P 500 sectors are positive for the year, despite the substantial rally for the index. The net profit margin for the S & P 500 also is expected to edge lower to 11.2%.

☆ Bonds are back this year after one of their worst stretches ever
▼ + stars: | 2023-03-27 | by ( Alex Harring | ) www.cnbc.com time to read: +6 min

Bonds are rebounding in 2023 following one of their worst years ever as the asset class reclaims its function as an effective hedge for stocks. "Bonds are acting like bonds again," said Gina Bolvin, president of Bolvin Wealth Management Group. What's more, because bonds tend to rally during a recession as benchmark rates decline, Devereux said she recommends focusing on high-quality fixed income including U.S. Treasurys, agency mortgage-backed securities and municipal bonds. Within fixed income, she also recommended investors stick to bonds with AAA or AA ratings, saying investors should look for risk in equities rather than lower-rated bonds. "While returns for stocks and bonds have been positive so far this year, that stocks and bonds are largely performing well at different times has made the ride smoother for investors," Bolvin said.

☆ Bank fears will likely lead to even more market volatility in the week ahead
▼ + stars: | 2023-03-24 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

Market turbulence could reign supreme once again in the week ahead, as investors worry about the potential for more trouble rippling through the banking system. The broader market was initially under pressure Friday as investors became jittery about Deutsche Bank . "The market is saying: 'You, the Fed, do not appreciate the slowdown that is going to hit us,'" Chandler said. "The market is going to do a lot better and it held onto its gains despite all the things that rocked the market. He added that market concern about banks has risen, and there is concern credit tightening will hurt the economy.

☆ Bank troubles roil markets and make Fed's decision next week more fraught
▼ + stars: | 2023-03-17 | by ( Patti Domm | In | ) www.cnbc.com time to read: +7 min

Even with Friday's sell-off, the S & P 500 and Nasdaq scored gains for the week. The S & P 500 rose 1.4%, compared to a tiny loss of 0.2% in the Dow . "If the U.S. economy is going into a recession, they're going to be buying less cloud service. On Friday, durable goods for February is reported, and there are releases of flash S & P Global PMI data for services and manufacturing. Durable goods 9:30 a.m. St. Louis Fed President James Bullard 9:45 a.m. S & P Global Manufacturing PMI 9:45 a.m. S & P Global Services PMI

☆ A recession could come sooner on cooling bank lending
▼ + stars: | 2023-03-15 | by ( Patti Domm | In | ) www.cnbc.com time to read: +1 min

In this article US2Y.VIXPACWFRCCSG.N-CH Follow your favorite stocks CREATE FREE ACCOUNTwatch nowStock Chart Icon Stock chart icon stx"Bear market bottoms are usually retested to ensure that the low is truly in. The rising risk of recession is now being exacerbated by the increased likelihood that banks will limit their lending," noted Sam Stovall, chief market strategist at CFRA. Treasury bonds, usually a more staid market, also traded dramatically. The 2-year Treasury yield was at 3.93% in afternoon trading, after it took a wild swing lower to 3.72%, well off its 4.22% close Tuesday. Stock Chart Icon Stock chart icon 2 y

☆ As yields fall, some investors are flocking to rate-sensitive technology stocks
▼ + stars: | 2023-03-14 | by ( Samantha Subin | ) www.cnbc.com time to read: +3 min

A sharp decline in bonds yields is providing much needed relief for big tech stocks that were under pressure in recent weeks. Yields fell drastically Monday as the collapse of Silicon Valley Bank wreaked havoc on the broader banking sector and pushed investors into safe haven assets. The move brought the 2-year Treasury yield to its biggest 3-day decline since 1987 , while the yield on the 10-year Treasury note hit its lowest level since February. Tech's suffered from extreme volatility in recent months as yields barreled toward multiyear highs, and the Federal Reserve restricted monetary policy to quell inflation. Higher rates typical means valuations are less attractive for tech stocks since future profits become less valuable.

☆ The bond market's recession warning has gotten more urgent
▼ + stars: | 2023-03-13 | by ( Patti Domm | In | ) www.cnbc.com time to read: +5 min

The bond market is sending a more urgent recession warning and also signaling that the Federal Reserve may have to pause raising interest rates — giving up its fight against inflation. The sharp move in the 2-year yield also resulted in a rapid steepening of the yield curve. "The steepening always starts to happen because the market expects the Fed to cut rates in response to that recession." DoubleLine Capital CEO Jeffrey Gundlach also said the "aggressively steepening" of the Treasury yield curve after inversion is "highly suggestive of imminent recession." The 2-year yield jumped above 5% after he spoke.

☆ Here's why the 2-year note yield above 5% doesn't shake our conviction in stocks
▼ + stars: | 2023-03-08 | by ( Kevin Stankiewicz | ) www.cnbc.com time to read: +6 min

But the Club's long-term outlook isn't swayed by this current bond market dynamic. Remember, bond yields moved in the opposite direction to bond prices. It was not, however, a great time to run away from stocks, Jim emphasized Wednesday. (There was of course the stock market crash in October 1987, which came to be known as Black Monday. (See here for a full list of the stocks Jim Cramer's Charitable Trust.)

☆ ‘World of pain’? These ETF strategies may be the solution for Treasury trading challenges
▼ + stars: | 2023-03-04 | by ( Sean Conlon | ) www.cnbc.com time to read: +1 min

As short maturity Treasury bond ETFs see big inflows, more investors are taking on single-bond strategies as a solution to macroeconomic challenges. Buying Treasury bonds typically involves opening an account on TreasuryDirect or through brokerage firms like Charles Schwab. When seeking to invest in short-term Treasury bonds, Nadig advised looking for ETF products like this or a competitor's ETF products that offer similar kinds of exposure. On Friday, the 2 Year Treasury (US2Y) yield fell by more than 4 basis points to 4.86%, but returns have still increased 43 basis points this year. The 6 Month Treasury (US6M) currently holds the highest yield at 5.137% as of Friday's close.

☆ Stocking up on income-paying assets? Here’s how to maximize their tax efficiency
▼ + stars: | 2023-03-04 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

The calculus of tax optimization Tax optimization begins with the three types of investment accounts available to investors: taxable brokerage accounts, tax-deferred accounts such as 401(k) plans and individual retirement accounts, and tax-free accounts like Roth IRAs. Tax-deferred accounts, meanwhile, allow money to accumulate free of taxes – but you're on the hook for income taxes when you take withdrawals. Your individual tax situation will also be a key factor in determining which income assets are best for you and where you should hold them. However, investors in a low tax bracket might be better off going for taxable bonds – which tend to pay higher yields than municipal bonds. Asset location Taxable brokerage accounts are generally a good place to hold T-bills if you're going to tap the money soon.

☆ The favorite trade today of Steve Eisman, from 'The Big Short,' is incredibly simple
▼ + stars: | 2023-02-27 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Renowned investor Steve Eisman, who called and profited from the 2007 housing crisis, revealed his favorite trade in the rapidly changing investing landscape — short term Treasurys. "We're buying bonds, especially Treasurys," Eisman, senior portfolio manager at Neuberger Berman, said Monday on CNBC's " Squawk Box ." "Assuming that we take the Fed at its word, which is obviously questionable, rates will stay higher for much longer," Eisman said. The "Big Short" investor believes that the sharp ascent in yields has created a new paradigm in the investing world, making growth-oriented, technology stocks less appealing. Laddering bonds means building out a portfolio of issues with different maturities and then reinvesting the proceeds as the bonds mature.

☆ The negative market turnaround is all about one thing: Rates
▼ + stars: | 2023-02-27 | by ( Alex Harring | ) www.cnbc.com time to read: +5 min

Investors looking for something to blame the recent stock market swoon need only to look at the bond market. Given this recent trading action, market technicians are looking at rates as the key catalyst for stocks going forward. US10Y YTD mountain 10-year in 2023 This back and forth raises questions on who should investors listen to: the stock market, or bonds. The stock market has been viewed by market participants as expecting the Fed to successfully cool inflation while avoiding a recession, a scenario referred to as a "soft landing." "The upward pressure on the terminal rate had an adverse effect on the stock market.

☆ Boost your portfolio income with this hybrid asset. Just be aware of the recession risk
▼ + stars: | 2023-02-16 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

For yield-hungry investors, preferred stocks offer a way to boost portfolio income. Preferred stocks are a hybrid asset. They have yields, which move inversely to the value of the preferred stock – the same way bonds do. "However, with bond yields rising, the place for preferred stock in a portfolio should be used sparingly." For those who want to stretch for yield and take on a little more risk, preferred stocks are another attractive possibility.

☆ JPMorgan’s top strategist says investors are 'taunting' the Fed and a sell-off is overdue
▼ + stars: | 2023-02-15 | by ( Fred Imbert | ) www.cnbc.com time to read: +1 min

Investors are messing with the wrong central bank, JPMorgan's Marko Kolanovic said Wednesday. "There is an old adage, 'don't fight the Fed,' but this behavior is not just fighting but also taunting the Fed with crypto, meme stocks, and unprofitable companies responding best to Fed communications," Kolanovic, the bank's chief global market strategist, said in a note to clients. He pointed out that since the Fed's rate hike on Feb. 1 , the Nasdaq-100 has climbed around 3%. Meanwhile, the 2-year Treasury note yield has jumped about 60 basis points in that time. US2Y YTD mountain 2-year note yield in 2023 This type of market behavior could lead to a sell-off in short order, according to Kolanovic.

☆ Bond yields are hot, but be smart how you invest. Here’s where to begin
▼ + stars: | 2023-02-06 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +6 min

Bond yields and prices move inversely to each other so, as rates rose, prices tumbled – and did so at an inopportune time since stocks were suffering, too. Thus, they have higher interest rate risk and greater price fluctuation. He likes short-term Treasury bond funds and ETFs. Another way to mitigate interest rate risk is to use a barbell: You hold equal amounts of shorter and longer-dated issues. "You don't have to reach too far in terms of credit risk and interest rate risk to capture healthy yield in today's environment."

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