FLGV News and Press, Franklin Liberty U.S. Treasury Bond From 02/23/22

In 2022, we have extreme uncertainty around the fundamental economic environment, the policy response, inflation and the response of policymakers. Although we are cautiously optimistic on the inflationary trajectory, when you look at the relatively low rate environment still, you ...

Inflation is money, therefore a true central bank should be able to judge whether or not there is too much. If there is, inflation’s going to be coming unless some intervention in the real money system. Instead, policymakers attempt to reverse-engineer their way into the inflat...

Investors who think they have no macro exposure quite often are just unaware of what macro risks they are running. One complaint I have seen multiple times that people were annoyed that macro analysts were opining on the topic, despite a lack of qualifications in international relatio...

The equities rebound towards the end of January, from the initial swoon, was reversed last week, and at this point, a new low is all but certain. There are a number of things troubling equities. Geopolitics are a fickle catalyst for anything, but it has certainly added to the misery i...

I think the idea of a “surprise” inter-meeting rate hike is silly in the context of modern Federal Reserve operating procedures. Unless inflation cools a lot, the base case has to be that we are looking at 25 basis points per meeting (plus the wild card of a starting 50)...

The price of government bonds, particularly those with shorter maturities have declined considerably over the past seven months. Growth rates and future earnings are inextricably connected. Value companies often command much lower price to earnings ratios. For further detail...

The stimulus payments led to a short-term boost in PCE, corresponding with increased economic growth. However, stimulus-fueled activity has a dark side. Economic stagnation arrives as expected as the sugar rush of liquidity continues to fade from the system. When it comes to the s...

So far, the Dow is off 5.6% from the highs (transports are -12.0%), the S&P 500 is -7.8%. Ex-energy and financials, the S&P 500 is near -10%. The Nasdaq is -14%, and the economically sensitive Russell 2000 is -16.9%–the same level it was at the start of 2021. At the...

The market expects at least four rate hikes beginning in March setting the stage for a tough year for fixed income. All else equal, higher yielding asset classes may hold up better as rates rise because a higher level of income earned will help to offset price losses as rates rise. ...

Investors that hold bonds to maturity earn the yield at which they purchased the security, and at maturity, they get paid face value. The US government issues its own currency and can always pay for anything with the Fed’s newly created money. Fixed income investors have go...