FLGV News and Press, Franklin Liberty U.S. Treasury Bond From 02/14/23

Summary The U.S. is now in the midst of producing record amounts of natural gas, which will help prices firm up. The milder winter kept prices low, but as the U.S. and Europe are hit by more Arctic air fronts in late winter, natural gas prices could start rising. As seasonal demand rise...

Summary Credit risk spreads remain tight. The problem with recency bias is that the immediate past is not likely to be an accurate guide for the characteristics of the next cycle. We do not expect that the Fed will start cutting rates any time soon. Originally published ...

Summary Over the past year, banks have reported tighter lending standards on commercial loans to small, large, and middle-market firms. Large corporate bankruptcies have spiked the most since the 2008 financial crisis. Stock valuations typically tumble during recessions as the unemp...

Summary The short-term interest rate on US Treasury bills is higher than the interest rate on medium-term US Treasury notes. There are no inversions of any consequence that we observed in the Alaska Muni Bond Bank series, and there is negligible inversion in the Alaska GO issues. Th...

Summary The question as to whether nominal spreads today are properly priced or not ultimately comes down to one thing, and that one thing is inflation. Year-on-year core inflation has been trending down since it hit a peak of 6.6 percent last September. Our expectation is that the ...

Summary Money supply growth fell again in December, falling even further into negative territory after turning negative in November for the first time in twenty-eight years. During December 2022, YOY growth in the money supply was at –2.4 percent. That's down from November's rate...

Summary One key element ahead is the probability that the ECB will hike by more than the Fed does in 2023. In the US, the spread between the 10yr yield and front-end rates is remarkably stretched, as can be gleaned from the deep inversion of the curve. We identify the US 10yr as bei...

Summary How many more Fed rate hikes to come? What the U.S. bond market is saying about the economy. Outlook for the US dollar. The U.S. Federal Reserve delivered a quarter-point hike in an effort to tamp down on inflation and signaled further increases at upco...

Summary The Fed's inflation fighting credibility is really on the line this year. The peak in inflation was mid-2022, and it's fallen a lot in the last six months and likely to keep falling. The long end of the yield curve is held in check to some extent by the Fed's stubbornness at...

Summary When the height of the entire Yield Curve is the 6-month Treasury Bill, you know that you are living in some very strange place. There are those that suggest that some kind of “pivot,” by the Fed is on the horizon. I am not in this camp, and do not expect to see th...