STIP News and Press, iShares 0-5 Year TIPS Bond From 09/27/22

Summary We believe it is unlikely that Fed Chair Jerome Powell will navigate a pivot to a less-hawkish stance before early in 2023. We expect China to grow at a meager 2%-3% pace in 2022, with the potential for these risks to bleed into 2023, as a slowing developed-market consumer...

Summary Inflation-adjusted interest rates are rising, rapidly. The lightning surge in real yields has a wide range of implications for macro and markets - a change that is now front and center for monitoring risk factors. As real yields rise further, the allure of locking in h...

Summary A market collapse is nothing but risk-aversion meeting an inadequate risk-premium; rising yield pressure meeting an inadequate yield. Value is not measured by how far prices have declined, but by the relationship between prices and properly discounted cash flows. My ad...

Summary The U.S. Federal Reserve delivered its third straight 75-bps rate hike on Wednesday. Based on the Fed's updated economic projections, the growth outlook is for a weaker economy over its projection horizon versus its June update. We know policy works with a lag, and inf...

Summary Federal Reserve Chairman Powell delivered another forceful message to markets that an early pivot back to rate cuts will not happen until inflation is under control. However, there is still an element of wishful thinking in the Fed’s forecasts and rhetoric that part...

Summary The Federal Reserve delivered another outsized rate increase at today’s FOMC meeting, raising the Fed Funds target by 75 basis points to a new range of 3.00%–3.25%. In early 2008, the Fed was cutting rates due to the financial crisis and great recession, whil...

Summary After several years of steady growth and low inflation, policymakers now face a delicate tradeoff between bringing down inflation or sustaining economic growth amid heightened macro and market volatility. We expect the Fed to remain committed to aggressive rate hikes. ...

Summary The recent August print showed that consumer prices continued to rise year over year – albeit more slowly than prior months. We have remained a bit more cautious than the market’s consensus inflation expectations. We’re not convinced that inflation...

Summary TIPS inflation factor can decline temporarily, even when inflation is high. We expect individual ultrashort TIPS to outperform ETFs for TIPS with maturities less than 5 years during the next several months. Of the three reviewed TIPS (VTIP, STIP, and PBTP), PBTP seems ...

Summary The financial markets were shocked by the US CPI for August. The evidence continues to accumulate that inflation is now in a downward trend. The monthly chart shows that the numbers remain very high relative to everything over the past twenty years prior to the past fe...