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"Investors have registered $195mn of outflows from HY muni ETFs over the past year while piling $3,130mn into long duration US Treasury bond funds. … In our view, Treasury bond ETFs have too much inflation risk and will continue to underperform Prudent Yield credit assets. Municipal bonds are debt issued by state and local governments whose interest payments can be tax-free for investors. But municipal bonds look relatively safe within that group, according to Bank of America. Bank of America's top-rated municipal bond ETFs include the SPDR Nuveen Bloomberg High Yield Municipal Bond ETF (HYMB) and the VanEck High Yield Muni ETF (HYD) .
Persons: Jared Woodard, Woodard, munis, HYMB Organizations: Bank of America, HY muni, , Federal Reserve, Bank of America's, Bloomberg, ETF, Muni Locations: HY
The latest concern threatening regional banks started on Jan. 31, when New York Community Bancorp. reported unexpected fourth quarter loss and a large loan loss reserve against futures losses, due in part to the bank's commercial real estate (CRE) exposure. One worry is that the NYCB credit downgrade could spur ratings agencies to take a closer look at other banks, or cause clients to again pull deposits out of regional banks. Determining exactly how unique NYCB's exposure to commercial real estate is will be a key focus for investors and analysts in coming weeks. A note on Wednesday from Wolfe Research analysts focused on banks and commercial real estate showed that regional banks have in general reduced their commercial real estate exposure over the past 15 years.
Persons: NYCB, Ian Lyngen, hasn't, Lyngen, D.A, Davidson, Peter Winter, Winter, Macrae Sykes, Banks, They're, Sykes, Wells Fargo, Jerome Powell, Bond, Tom Fitzpatrick, RJ O'Brien, Fitzpatrick, — CNBC's Michael Bloom Organizations: Investors, New York Community Bancorp, Moody's, Street, Silicon Valley Bank, BMO, Treasury, Wolfe Research, UBS, Gabelli, CNBC Locations: Silicon, Wells
Sam Dogen is the author of "Buy This, Not That"Sam Dogen knows a thing or two about passive income. By reinvesting his passive income along with money he made through his website and book sales, Dogen was able to boost the family's income over the years as well. In 2023, Dogen's passive income portfolio, which includes stock, bond and real estate investments, among others, generated about $380,000. According to Dogen, the best way to begin earning passive income is through your brokerage account. "If you want passive income right now, I think the best option is Treasury bonds at 5%," he says.
Persons: Sam Dogen, Dogen, Stocks Organizations: U.S ., Treasury Locations: San Francisco
I didn't want to buy the house in 2024 because I think bidding wars are going to return — because mortgage rates will come down. I don't think about it as trying to make a profit anymore. You want to save as much as possible, invest as much as possible, which creates a more lean and frugal lifestyle so you can retire early. But do you really want to live a lean lifestyle — and then retire early to a very lean and frugal lifestyle? Rental properties were what gave me the courage to retire early, along with negotiating a severance package in 2012.
Persons: , Sam Dogen, It's, Dogen, I've, I'm, it's, you've Organizations: Service, Business, San Locations: San Francisco
Bullion has climbed 1.8% this week, set for its best weekly gain since late December. Lower interest rates boost non-yielding bullion's appeal. Spot gold rose nearly 1% on Thursday after data from the U.S. Labor Department showed initial jobless claims rose more than expected last week. Fed Chair Jerome Powell pushed back on the idea of an interest rate cut in the spring, but expressed confidence in inflation moving towards the desired 2% range. Money market pricing shows traders are nothing but sure about a rate cut in May.
Persons: Brian Lan, Jerome Powell Organizations: Novosibirsk Refining Plant, Treasury, Federal Reserve, GoldSilver, U.S . Labor Department Locations: Novosibirsk, Russia, Singapore, U.S
More importantly, though was Federal Reserve Chair Jerome Powell's pushback against the idea that rate cuts are imminent. So, what does this mean for the housing market, which is eagerly anticipating lower rates to make housing even slightly more affordable? According to Redfin, pushing out timelines for Fed rate cuts means mortgage rates are likely to remain elevated for longer this year, but it doesn't mean relief is off the table for homebuyers in 2024. "Regardless of any short-term volatility in mortgage rates, we expect rates to come down gradually throughout the year," Redfin's Chen Zhao wrote following the Fed meeting. AdvertisementThe real estate group notes that other forces are at work in the mortgage market as well, and the Fed isn't the only input.
Persons: , Jerome Powell's pushback, Redfin's Chen Zhao, Redfin, we'll, Powell, Fannie Mae Organizations: Service, Reserve, Business, US Department of, Treasury, Bank of America
Gold prices gain as traders assess hopes for sizeable Fed rate cut
  + stars: | 2024-02-01 | by ( ) www.cnbc.com   time to read: +2 min
Spot gold rose 0.5% to $2,046.63 per ounce by 0355 GMT. The Fed left interest rates unchanged and knocked down the idea that the U.S. central bank could cut rates in the spring, but dropped a long-standing reference to possible further hikes. Futures pared bets for a rate cut in March to 35.5% from 90% at 2023-end, but increased chances of a reduction in May to 96%, according to LSEG's interest rate probability app IRPR. Traders are pricing in about 142 basis points (bps) of Fed rate cuts for this year, up from bets of about 130 bps of reductions on Wednesday morning. Data showed U.S. private payrolls rose far less than expected in January.
Persons: Gold, Jigar Trivedi Organizations: Korea Gold Exchange, Reserve, Reliance Securities, Traders, U.S, New, New York Community Bancorp, Treasury, Investors Locations: Seoul, South Korea, U.S, New York
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe hedging property of Treasury bonds is here, says JPMorgan Asset Management’s Priya MisraPriya Misra, JPMorgan Asset Management fixed income portfolio manager, joins 'Squawk Box' to discuss the latest market trends, why she believes there's still a 25-30% chance or a hard landing, the Fed's rate path outlook, and more.
Persons: Priya Misra Priya Misra, there's Organizations: JPMorgan, Management
It's ironic: We are at a moment where supply of money and demand for goods are intersecting. We have two markets: the Treasury market and the equity market, with the first more powerful than the second, even if we can't tell that in the scrum of earnings announcements. If the Fed signals more rate cuts, then we will be set up for higher stock prices if the companies deliver good earnings. The possibility of higher earnings so far has been controlled by supply and demand and the disinflation it is breeding, which may continue this week. Hence the power of their earnings to generate the mask of a higher market price-to-earnings ratio.
Persons: We've, Josh Frost, , disinflation, Tesla, Amy Hood, McCormick, Costco's Kirkland, Jerome Powell doesn't, Price, it's, Dupont —, Dupont, Josh Frost —, Jim Cramer's, Jim Cramer, Jim, Jerome Powell, Brendan Mcdermid Organizations: Treasury, Federal Reserve, Devices, Microsoft, Apple, Financial Markets, Nvidia, Google, Walmart, Starbucks, Fed, Caterpillar, Boeing, Jim Cramer's Charitable, CNBC, New York Stock Exchange
Treasury yields fall ahead of economic growth numbers
  + stars: | 2024-01-25 | by ( Elliot Smith | ) www.cnbc.com   time to read: +1 min
ET, the yield on the benchmark 10-year Treasury note dropped 2.3 basis points to 4.1549%, while the yield on the 30-year Treasury bond slid 2.7 basis points to 4.3851%. U.S. Treasury yields fell on Thursday morning as markets await a first estimate of fourth-quarter economic growth. Wall Street will be trying to ascertain what that means for American economic growth in 2024, while the Federal Reserve will be taking the figure into account as it considers its next monetary policy move. A second major data point is due Friday in the form of December's personal consumption expenditures price index, the Fed's preferred inflation gauge. Auctions will be held Thursday for $90 billion each of 4-week and 8-week Treasury bills, along with $41 billion of 7-year notes .
Organizations: Treasury, U.S, U.S . Department, Federal Reserve Locations: U.S
ET, the yield on the benchmark 10-year Treasury note was down by around 3.7 basis points at 4.1050% and the yield on the 30-year Treasury bond slipped 3.7 basis points to 4.3418%. U.S. Treasury yields were lower on Wednesday morning as investors brace themselves for two key pieces of economic data in the second half of the week. Two significant pieces of economic data are on the slate this week: a preliminary fourth-quarter gross domestic product growth figure is due on Thursday, followed by the Commerce Department's closely watched personal consumption expenditures price index for December on Friday. Both data points will inform the Federal Reserve as it maps out when and by how much to begin cutting interest rates, which will be a key factor in determining the path of markets and the economy this year. Auctions will be held for $60 billion of 17-week Treasury bills, $61 billion of 5-year notes and $28 billion of 2-year FRNs (floating-rate notes).
Persons: Jim Reid, Bullard, Reid, that's Organizations: Treasury, U.S, Commerce, Federal Reserve, Deutsche Bank's, Global, Bank of Canada, European Central Bank, St Louis Fed, PMI
ET, the yield on the benchmark 10-year Treasury note was around 1.7 basis points higher at 4.1109% while the yield on the 30-year Treasury bond was up just over 1 basis point at 4.3284%. U.S. Treasury yields nudged slightly higher on Tuesday morning, as market participants await the release of key economic data points later in the week. Investors are trying to gauge when the Federal Reserve will begin cutting interest rates, which will be a key determinant of the trajectory for markets and the economy this year. Despite the uncertain rate outlook, risk-on sentiment remained robust on Monday, as the Dow Jones Industrial Average and the S&P 500 both notched all-time highs. Auctions will be held Tuesday for $46 billion of 52-week Treasury Bills and $60 billion of 2-year notes .
Persons: that's, it's, Guillermo Felices, CNBC's Organizations: U.S, Treasury, Investors, Federal Reserve, Commerce, Dow Jones Industrial, Global Investment, Treasury Bills
The yield on the benchmark 10-year Treasury note was down around 2 basis points at 4.1263% while the yield on the 30-year Treasury bond slid around 2.5 basis points to 4.3285. U.S. Treasury yields pulled back on Monday morning as investors geared up for another big week of economic data . Two significant pieces of economic data are on the slate this week, with a preliminary fourth-quarter GDP growth figure due on Thursday and the Commerce Department's closely-watched PCE price index for December out Friday. Chicago Fed President Austan Goolsbee told CNBC on Friday that investors should be watching this data point when trying to plot the Fed's rate path. Auctions will be held Monday for $77 billion of 13-week Treasury bills and $70 billion of 26-week bills.
Persons: Dow Jones, Austan Goolsbee Organizations: Treasury, Federal Reserve, Commerce, Chicago Fed, CNBC
Rising bond yields have thrown cold water on the major averages, but a few winners may emerge even if rates remain elevated. These developments have spurred worries that the Fed policymakers could keep rates higher for longer. Bond prices and yields are inversely related, which means that as yields rise, bond prices will fall. Generally, insurers benefit when interest rates rise , since their investment portfolios will generate more yield. Shares of both real estate investment trusts, which specialize in communications services, could take a hit as higher rates make their dividends less attractive.
Persons: W.R ., Humana, Jefferies, Centene, Sherwin, Williams, Baird Organizations: Federal Reserve, CNBC Pro, Treasury Bond ETF, CME Group, Molina Healthcare, W.R, Florida Medicaid, American Tower Corporation, SBA Communications Locations: Molina, UnitedHealth, Florida
The 10-year Treasury yield started the new year trading around 3.8% after a steep decline in late 2023. Against this backdrop, CNBC Pro asked three strategists and money managers how they would allocate $50,000 with yields rising again. Specifically, he recommended bills with a three- to six-month maturity, which investors can gain exposure to through exchange-traded funds such as the Vanguard Short-Term Treasury ETF (VGSH) or SPDR Portfolio Short Term Treasury ETF (SPTS) . Exchange-traded funds that offer exposure to these assets include the iShares 20 Plus Year Treasury Bond ETF (TLT) and Vanguard Intermediate-Term Corporate Bond ETF (VCIT) . Invest in dividend-growing value stocks Newton Investment Management's John Bailer recommended investors solely allocate into value stocks with sustainable and growing dividends.
Persons: Kumar, VGSH, VCIT, John Bailer, JPMorgan Chase, They've, they've, Bailer, Northrop Grumman, James Abate, Abate, Johnson, Geoff Martha, Colgate's Organizations: Treasury, Nasdaq, Dow Jones, CNBC Pro, Sri, Kumar, CNBC, AAA, Exchange, Treasury Bond ETF, Vanguard, Stock Market, U.S, Bloomberg, Newton Investment, JPMorgan Chase, JPMorgan, Northrop, Asset Management, Johnson, Colgate, Palmolive Locations: Bailer's
With CDs, you deposit a specific amount of money for a fixed period of time — months or years — at a guaranteed rate of interest. While you can't prematurely withdraw those funds without paying a penalty, the trade-off is that CDs tend to offer higher interest rates than most savings accounts. That's much higher than the average annual percentage yield you'll find for traditional savings accounts, which was 0.57% as of Jan. 16, 2024, per Bankrate. While high-yield savings might offer APRs more comparable to CDs, you can often find CDs with slightly higher rates. Some CDs also offer higher yields than one-year Treasury bonds, which are comparably safe investments.
Persons: Gen Zers, Jay Zigmont Organizations: Federal Reserve, Federal Deposit Insurance Corporation, Childfree
There are some trades for investors looking to avoid a possible asset bubble and other potholes that could be ahead. The standard 30-year fixed mortgage rate rose even further, a function of both the rising risk-free rate and the rising spread. Buying bonds has interest rate risk. Moreover, the spread between mortgage rates and Treasuries is unusually high. Risk-free rates stay static or even rise mildly, but if the spread narrows mortgage rates could fall, a tailwind for a mortgage portfolio.
Persons: There's, Murray Rothbard, Milton Friedman, Ben Bernanke, Bernanke's, Janet Yellen, Jerome Powell, Howard Marks, Charlie Munger, Berkshire Hathaway, Marks, Steve Eisman, Neuberger Berman, they've Organizations: Federal Reserve, Fed, Federal Reserve Bank, Vanguard Value, Technology, MBS Locations: U.S, deflate, Berkshire
Investors poured cash into these fixed income ETFs in 2023
  + stars: | 2024-01-09 | by ( Darla Mercado | Cfp | ) www.cnbc.com   time to read: +6 min
The Federal Reserve's monetary policy set the tone for the fixed income world in 2023 – right down to which exchange traded funds investors picked to take advantage of higher interest rates. Bond yields have an inverse relationship to their prices, so that when prices decline, yields rise and vice versa. The Vanguard Long-Term Treasury ETF (VGLT) was another favorite of investors, with about $7.3 billion in net flows in 2023. Indeed, those strategies proved popular with investors in 2023, as the Vanguard Total Bond Market ETF (BND) and iShares Core U.S. Aggregate Bond ETF (AGG) were ETFs with the second and third highest net flows, per Morningstar.
Persons: It's, Paul Olmsted, Matthew Bartolini, Olmsted, Morningstar, , it's, BND, AGG Organizations: Investors, Bloomberg Finance, State Street Global Advisors, Morningstar, SPDR, SPDR Americas Research, Street Global Advisors, State, Treasury Bond ETF, Bloomberg, SGOV, SEC, Treasury, Fed, Vanguard, Bond Market, Core, Aggregate Bond Locations: SPDR Americas, Central
Municipal bonds, favored for their tax-free income, are looking at a solid year in 2024 and could be a compelling purchase for investors hoping to lock in attractive yields. "We will likely see positive total returns," said Cooper Howard, fixed income strategist at the Schwab Center for Financial Research. "Munis are one of the best things going in the fixed income space," he said. It provides all the attributes of fixed income, and it serves as ballast to an overall diversified portfolio." Naturally, rates are on the minds of fixed income investors and strategists, as well as recession risk.
Persons: Cooper Howard, who've, Peter Higgins, Ben Barber, Schwab's Howard, Paul Malloy, It's, Beth Foos, Malloy, Howard, you've Organizations: Schwab Center, Financial Research, Morningstar U.S, Municipal, Shelton Capital Management, York Life Investments, Franklin, AAA, Vanguard, Bond, Morningstar Locations: New York , New Jersey, California
Central bank blunders undermine tough rate talk
  + stars: | 2023-12-05 | by ( Francesco Guerrera | ) www.reuters.com   time to read: +8 min
Comments by central bankers underline their desire to keep interest rates high until price growth quiesces. Policymakers’ recent mistakes mean they will struggle to convince investors their tough talk is real. U.S. Federal Reserve Chair Jay Powell says his fellow policymakers are “not thinking about rate cuts at all”. In May, after another U.S. regional bank failure, markets concluded that the Fed’s rate hike at the beginning of that month would be its last. Respected central bankers might be able to convince markets that these numbers don’t portend imminent rate cuts.
Persons: Jay Powell, Christine Lagarde, Andrew Bailey, Powell, backtrack, , Lagarde, Treasuries, BoE, Bailey, Ben Bernanke, Jacob Frenkel, Peter Thal Larsen, Oliver Taslic, Thomas Shum Organizations: Reuters, Traders, U.S . Federal, European Central Bank, Bank of England, titans, Deutsche Bank, Treasury, Reuters Graphics Reuters, LSEG, Silicon Valley Bank, Fed, ECB, Bank of Israel, Federal Reserve, European, Thomson Locations: Silicon, Bailey, United States, Ukraine, Central
Bank of England drags Bagehot into the shadows
  + stars: | 2023-12-01 | by ( Liam Proud | ) www.reuters.com   time to read: +8 min
That is no longer tenable, in part because of reforms to bank regulation that shifted activity from traditional lenders to financial market players. These days, the institutions in need of urgent liquidity are just as likely to be pension funds, insurers or hedge funds. The British central bank’s initial ideas make sense, but only solve part of the problem. The central bank can short-circuit the panic by opening the credit taps. Central banks are only just starting to grapple with what it means to be a lender of last resort in that context.
Persons: Walter Bagehot’s, Andrew Hauser, BoE, WALTER, Gurney, Peter Thal Larsen, Streisand Neto, Thomas Shum Organizations: Reuters, Bank of England, Reuters Graphics Reuters, U.S, Treasury, Federal Reserve, Pensions, . Treasury, Citadel, Millennium Management, City of, U.S . Federal, Gurney & Company, Victorian, Thomson Locations: British, City, City of London, Basel, Overend, Lombard
Zero-day commodity options have now entered the ETF space
  + stars: | 2023-12-01 | by ( Natalie Zhang | ) www.cnbc.com   time to read: +1 min
Investors can now trade commodities and a Treasury with a popular short-term options strategy. The Nasdaq recently launched five zero-day options-based exchange-traded funds: United States Oil Fund (USO) , United States Natural Gas Fund (UNG) , SPDR Gold Shares (GLD) , iShares Silver Trust (SLV) and iShares 20+ year Treasury Bond ETF (TLT) . It has taken the options market by storm. The surge in activity surrounding zero-day options has some analysts worried about a negative impact on the market. "I don't think the tools themselves are inherently breaking the market," Nadig said.
Persons: Dave Nadig, CNBC's, Nadig, it's Organizations: Treasury, Nasdaq, United States Oil Fund, United States Natural Gas Fund, Bond ETF Locations: United
Duffie said more could be done, but added that the "official sector Treasury market datasets are far more comprehensive now than they were a few years ago." They would have much better estimates of the basis trade, for example, but they still wouldn't know exactly how big it is. The trade involves hedge funds exploiting the difference between a Treasury security and its derivative in the futures market. The CFTC data includes other trades that hedge funds enter into that involve shorting treasury futures, the two industry sources said. At a major Treasury market conference earlier this month, officials underscored the importance of good data.
Persons: Darrell Duffie, Duffie, John Williams, Sherlock Holmes, Paritosh Bansal, Anna Driver Organizations: U.S . Federal Reserve, Financial Research, Stanford University, Treasury, Futures Trading Commission, Securities, Exchange Commission, Regulators, ” New York Fed, Thomson Locations:
Dollar defensive as markets weigh US rates outlook
  + stars: | 2023-11-24 | by ( Ankur Banerjee | ) www.reuters.com   time to read: +3 min
A woman counts U.S. dollar bills at her home in Buenos Aires, Argentina August 28, 2018. The dollar index , which measures the U.S. currency with six peers, eased 0.029% to 103.73, staying close to the two-and-a-half month low of 103.17 it touched earlier this week. The Australian dollar rose 0.14% to $0.657, while the kiwi rose 0.07% to $0.605. The yield on the 30-year Treasury bond rose 2.8 basis points to 4.576%. Reporting by Ankur Banerjee in Singapore; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.
Persons: Marcos Brindicci, Sterling, Cash Treasuries, Ankur Banerjee, Jacqueline Wong Organizations: REUTERS, Rights, U.S, Federal, Fed, Bank of Japan, ING, Treasury, Thomson Locations: Buenos Aires, Argentina, Rights SINGAPORE, Germany, Asia, Singapore
Dollar defensive as markets weigh U.S. rates outlook
  + stars: | 2023-11-24 | by ( ) www.cnbc.com   time to read: +2 min
The dollar was restrained on Friday by uncertainty over the path of U.S. interest rates, while the euro held overnight gains as data hinted that the downturn in the euro zone may be easing. The dollar index , which measures the U.S. currency with six peers, eased 0.029% to 103.73, staying close to the two-and-a-half month low of 103.17 it touched earlier this week. The Australian dollar rose 0.14% to $0.657, while the kiwi rose 0.07% to $0.605. Cash Treasuries resumed trading in Asia after Japan's holiday on Thursday, with the yield on 10-year Treasury notes up 2.9 basis points at 4.445%. The yield on the 30-year Treasury bond rose 2.8 basis points to 4.576%.
Persons: Sterling, Cash Treasuries Organizations: U.S, Federal, Fed, Bank of Japan, ING, Treasury Locations: Germany, Asia
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