FLGV News and Press, Franklin Liberty U.S. Treasury Bond From 07/09/21

The pandemic disrupted a well-tuned but perhaps overly optimized global economy and time-shifted the production and consumption of various goods. Fed officials have told us repeatedly they are not worried about inflation; they believe it is transitory. We are a bit less dismissive of ...

LPETTET/iStock via Getty Images A prolonged drop in U.S. Treasury yields is catching bond and fixed income traders by surprise, as well as other investors in the broader financial markets. The 10-year U.S. Treasury yield dropped below 1.3% on Wednesday, and fell another 6 bps overnight t...

What makes the current scenario most interesting is the fall in the US Ten-Year note yield (TNX), which looks headed for a test of the 1.4% area. Certainly, the fall in bond yields points to expectations of a weakening economy, as well as the possibility that the Fed won’t open...

The fall in market rates has little to do with the Fed, at least not directly. Rates were falling long before the Fed had its hawkish wake-up moment. Real rates have remained stubbornly negative too, which made little sense against a vibrant macro story. The 10yr real yield is now bac...

It would appear that the U.S. Treasury market is supported by Japanese and eurozone money, as there is simply no yield available in either German bunds or Japanese Government Bonds, which makes the 120 bp positive Treasury 2-10 spread a mouth-watering opportunity to a European or Japanese...

During much of last quarter, the Atlanta Fed’s GDPNow model indicated an annual rate over 10% for the second quarter, but last Friday, they downgraded their estimate to the lowest number we’ve seen since the quarter began - an annual pace of just 7.8%, down from +8.6% on Jul...

Was the Fed message a shift in reaction function or economic outlook? Heightened rate sensitivity from incoming jobs and economic data. Strap in for a bumpy market this summer. For further details see: Will Interest Rates Rise As Jobs Recover This Summer?

Risk-adjusted performance for the Global Market Index (GMI) continued to push higher in June, based on the annualized Sharpe ratio for a rolling ten-year window via monthly data. GMI’s 10-year SR increased to 0.84, the highest in 18 months. GMI is an unmanaged, market-value...

As we mark the halfway point of the year, the economy is in full recovery mode and asset prices are soaring. As we enter the second half of the year though, it is hard to ignore some contradictions. Economic growth in H1 is going to print a big number, and yet, the 10-year Treasury no...

Reverse repurchase agreements have exploded to a trillion dollars in money that the Fed is sucking out of the financial system. The Fed is effectively being forced by interest rates within the intra-banking system to take as much cash out of bank reserve accounts as it is adding via i...