IVOL News and Press, Quadratic Interest Rate Volatility and Inflation Hedge From 01/27/21

There is an important difference between input cost inflation and monetary inflation. Milton Friedman famously said inflation is a monetary phenomenon. He was only half right. Input cost inflation hits both consumers' purchasing power and businesses' profit margins. The 2020s ...

While we were asked for our thoughts on a vast range of topics, there were a few questions that came up over and over again. Deficit spending designed to reactivate unused resources can jumpstart economic activity and materially improve economic growth, and it would be unusual to see ...

After a dramatic "risk-on" rotation beginning in early 2020, we greet the new year with a technically oversold US currency and overbought stock market. In other words, investor positioning has become lopsided, arguing that a countertrend bounce in the "greenback" and near-term drawdow...

With Treasuries blowing right through the 100% of GDP milepost - and likely poised to reach 125% within the next year or two - there's no time like the present to recognize our nation is in serious fiscal trouble. The pandemic is not close to my greatest worry. These days I have great...

In the past few months, the surge in commodity prices has led to rising concerns over an unexpected rise in long-term inflation expectations. Most of participants are expecting higher global CPI prints in the month to come. However, the pre-Covid-19 symptoms (demographic, disrupti...

Last week, the 10-year Treasury bond yield continued to rise, as last Tuesday's bond auction had a lackluster bid-to-cover ratio of 2.47. This means that the Fed is going to have to do more quantitative easing or the federal government is going to have to curtail its spending. The Fed...

At the halfway point of January, the market has struggled to hold onto its gains. With another $2.8 trillion in stimulus hitting the economy, inducing the Fed to do more QE, markets were seemingly unimpressed. As we will discuss, there is ample evidence that "everyone is currently...

The reflation trade is worth paying attention to for several reasons - it could extend the rotation out of growth stocks into value, small cap and other relative underperformers in recent years. A short-term inflationary jump can be expected later this year when the vaccine has scaled...

For the fund-flows week ended Jan. 13, some investors veered to fixed-income securities that were either tied to inflation or adjust for rising yields, while others remained in search of yield, said Tom Roseen, head of Research Services at Refinitiv Lipper.For the flows week, investors inject...

The federal deficit for the first quarter of the new fiscal year was reported at $573 billion, up 61% y-o-y. Washington borrowed 45 cents of every dollar spent during the quarter. It can be called "Financial Dominance" or the layperson's "trapped," but markets operate today with high ...