IVOL News and Press, Quadratic Interest Rate Volatility and Inflation Hedge From 01/05/21

The 10-year breakeven inflation rate returned to its 2018 level this week. The higher rate could mean people may think inflation will return soon – and the odds are it will. Economists argue that inflation expectations tend to be self-fulfilling. So, if the market sees infl...

The President-elect has mentioned countless themes that will call for additional Treasury bonds to be issued. The cost in interest, alone, will be significant. The yields on America's sovereign debt will not go unnoticed, and the push will be on for the Fed to lower our interest rates...

Anyone with connectivity can communicate, advertise and interface today with extraordinary ubiquity, and at virtually no cost. This was the case before the 2020 pandemic completely turbocharged this phenomenon, which leaves profound implications for the post-pandemic world. With recen...

The S&P 500 slipped 0.2% (up 14.6% y-t-d), while the Dow was little changed (up 5.8%). Three-month Treasury bill rates ended the week at 0.08%. For the week, the U.S. dollar index increased 0.2% to 90.223 (down 6.5% y-t-d). For further details see: Weekly Commentary:...

M1 money supply (the most liquid forms of cash - bills, checks and basic savings accounts) had grown faster than any time in history. This could be due to Biden's promised termination of the special capital gains tax rate that is lower than tax on regular income. So, the rich are scra...

While most hope more stimulus will cure the economy's ills, the "2nd derivative effect" will be problematic. Of course, since vast portions of the stimulus package went to everything but "helping out the average American," such ensures the impact will be far less. During Q4-2020, not ...

Federal Reserve Assets surged $120 billion last week to a record $7.363 trillion. Fed Assets inflated $3.593 trillion, or 95%, over the past 66 weeks. Overheated markets have become wholly enchanted by this frightening monetary inflation. Whether it's the U.S., China or elsewhere,...

One of the responsibilities of a prudent investment manager is to avoid as many meaningful surprises as possible. A meaningful surprise is one that prevents the accomplishment of a strategic goal. Also, some surprises won't be anticipated, but will be helped by a quick reaction coming...

Recently, President-Elect Joe Biden named Janet Yellen to be his administration's Treasury Secretary. Yellen quickly proclaimed the reason "I became an economist was because I was concerned about the toll of unemployment on people, families, and communities." Such provides excellent c...

The rise in breakeven inflation in the United States is not particularly surprising, as it is just a return to projecting previous conditions forward. Since inflation-linked bonds are based on overall CPI, the inflation payout is greatly influenced in the near run by changes in energy...