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☆ Inflation is the number one issue for me, says Yardeni Research president
▼ + stars: | 2023-09-27 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInflation is the number one issue for me, says Yardeni Research presidentEd Yardeni, Yardeni Research president, joins 'Squawk on the Street' to discuss what Yardeni's worried about in the economy, whether the U.S. government should be worried about bond vigilantes, and the best-case scenario for the economy.

Persons: Ed Yardeni Organizations: Yardeni Research

☆ Bond vigilantes are 'saddling up.' Here's how concerned investors might take action over the ballooning federal deficit.
▼ + stars: | 2023-08-20 | by ( Jason Ma | ) www.businessinsider.com time to read: +4 min

Bond vigilantes are "saddling up" again as federal deficits balloon, said market veteran Ed Yardeni. And I think the bond vigilantes are quite concerned about that." Now there are signs they are stirring again as bond yields continue to climb despite signs of cooling inflation. And I think the bond vigilantes are quite concerned about that," he said. In a now-legendary commentary from 1983 titled "Bond Investors Are the Economy's Bond Vigilantes," Yardeni warned, "So if the fiscal and monetary authorities won't regulate the economy, the bond investors will.

Persons: Ed Yardeni, e've, Yardeni, we've, James Carville, Bill Clinton, Clinton, Bond Organizations: Service, Treasury, Yardeni, Bloomberg, Federal, Republican Locations: Wall, Silicon

☆ Japanese yen tumbles, bonds rally after BOJ keeps policy ultra easy
▼ + stars: | 2023-01-18 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

The bank, however, maintained ultra-low interest rates, including its 0.5% cap for the 10-year bond yield. The dollar also gained 2.5% against the Japanese yen to 131.4 yen, in its biggest percentage daily rise since March 2020. In a Reuters poll, 97% of economists expected the BOJ to maintain its ultra-easy policy at the meeting. A survey of global fund managers by BofA Securities out on Tuesday showed that expectations of further appreciation in the Japanese yen in January were the highest in 16 years. The dollar index , which measures the safe-haven dollar against six peers, rose 0.4% at 102.84.

And for financial markets it begs the question as to whether the extent of the monetary or fiscal tightening currently assumed will ever actually happen. The OBR reckons UK consumer price inflation has now peaked and will back off to a full-year rate of 7.4% next year. But assuming standing market forecasts for energy prices and BoE rates, it then sees inflation fall below zero for eight quarters from the middle of 2024. The BoE also expects headline inflation to plummet into 2024 - and its 'fan chart' of the range of possible outcomes also has an outside chance of deflation then too. Delaying spending cuts until after an election won't help much in that regard if indeed they're seen necessary at all.

☆ Europe’s pain will be ultimately worth it
▼ + stars: | 2022-10-31 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

The combination of crises, caused by President Vladimir Putin’s invasion of Ukraine and hefty borrowing when interest rates were artificially low, will test the bloc. Then the European Central Bank was able to keep interest rates low and buy government debt. ENERGY SQUABBLESEU leaders congratulated themselves early in the year when they came together to condemn Putin’s invasion, impose sanctions on Russia and support Ukraine. EU leaders are already complaining about high interest rates, with Giorgia Meloni, the new Italian prime minister, criticising the ECB last week. But the central bank cannot avoid raising interest rates even if it wanted to.

☆ Taking cover in bonds ahead of a recession? BlackRock says that's now an 'obsolete' strategy
▼ + stars: | 2022-10-20 | by ( Weizhen Tan | ) www.cnbc.com time to read: +4 min

One important part of the recession playbook is "obsolete" — and that's seeking shelter in bonds, according to BlackRock, the world's largest asset manager. "We're underweight government bonds because yields have room to move higher, and we don't think they can be a safe haven when recession comes," BlackRock wrote. Higher rates and inflation will create a "ripe environment" for investors to demand higher term premiums for long-term bonds, BlackRock said. The move sent financial markets into a tailspin , as investors ditched U.K. bonds and sold off the pound. What to buy Investors still looking to buy bonds should prefer inflation-linked ones as they are "not pricing in persistent inflation," BlackRock said.

☆ The urgent search for the perfect inflation hedge
▼ + stars: | 2022-10-20 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

But when inflation takes off, stocks and bonds become positively correlated, rising and falling together. The failure of bonds and stocks to deliver protection when inflation spikes has forced investors to seek other hedges. “Each attempted inflation hedge has its particular attractions, risks, and shortcomings,” wrote the journalist Henry Hazlitt in 1978. Hazlitt wrote that the only reliable inflation hedge is to end inflation. If the Fed loses its battle against rising prices, more people will come to appreciate the insurance they provide.

Societe Generale's contrarian strategist Albert Edwards said Britain's reawakening of the fabled 'bond vigilantes' would "reverberate around financial markets for years to come." And many read across to ebbing liquidity in U.S. Treasury markets for a take on Fed parameters this time around too. Bank of America's October survey of global fund managers, released on Tuesday, certainly backs that up. Register now for FREE unlimited access to Reuters.com Registerby Mike Dolan, Twitter: @reutersMikeD. Charts by Bank of America, Vincent Flasseur and Lewis Krauskopf; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

"It is really not the right time to experiment with fiscal policy," AXA chief economist Gilles Moec said about the UK's moves, assessing that Monday's U-turn may have appeased "the bond vigilantes for now". The term, bond vigilantes, refers to debt investors imposing fiscal discipline on profligate governments by forcing their borrowing costs higher. Ed Yardeni, who coined the bond vigilantes term in the early 1980s, penned a blog post saying "They're Baaaack!" Even U.S. President Joe Biden was speaking the bond vigilante's language at the weekend, noting he wasn't the only one that thought the UK plan was a "mistake". "This is probably the biggest example in practice of the bond vigilantes activity," said Antonio Cavarero, head of investments at Generali Insurance Asset Management.

☆ The bond vigilantes will feast on the U.K. over the next few weeks, says Andy Brenner
▼ + stars: | 2022-10-14 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe bond vigilantes will feast on the U.K. over the next few weeks, says Andy BrennerAndy Brenner, head of international fixed income at National Alliance Securities, joins 'The Exchange' to discuss if any danger has been averted in the United Kingdom, where Brenner looks for potential spillover effect, and more.

☆ October's wild trading could give way to a new stock rally, as earnings roll out in the week ahead
▼ + stars: | 2022-10-14 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

But Emanuel sees the chance for a 17% to 20% rally in the S & P 500. The S & P 500 was down about 0.9% for the week, as of Friday afternoon, and it was hovering just above 3,600. S & P 500 earnings are expected to grow by 3.6% for the third quarter, based on actual reports and estimates, according to Refinitiv. Without the boost from more than doubling profits from energy companies, S & P earnings would decline by 3.1%. Week ahead calendar Monday Earnings: Bank of America , Bank of NY Mellon, Charles Schwab 8:30 a.m.

☆ Britain’s Sketchy Growth Plan Is Scarier Than Its Bond Vigilantes
▼ + stars: | 2022-09-26 | by ( Jon Sindreu | ) www.wsj.com time to read: +1 min

A big selloff in gilts points to worries about too much supply, and to the possibility that the BOE could raise borrowing costs even faster than expected. The expansive, expensive economic policy of new U.K. Prime Minister Liz Truss has revived fears of “bond vigilantes.” But the turmoil in financial markets may have more to do with the plan’s unclear return on investment than its hefty borrowing requirements. On Monday, sterling dropped to a record low against the U.S. dollar in overnight trading before rebounding slightly. Investors already expected Ms. Truss’s new government to spend north of £150 billion, equivalent to $163 billion, to freeze energy bills, but on Friday her Treasury chief, Kwasi Kwarteng , paired this with the most sweeping tax cuts since 1972, according to the independent Institute for Fiscal Studies, as well as totemic measures such as scrapping a cap on bankers’ bonuses. The total package will cost £291 billion, or a colossal 12.6% of gross domestic product, over the next five years, according to estimates by UBS economist Anna Titareva .

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