STIP News and Press, iShares 0-5 Year TIPS Bond From 12/24/22

Summary Fiscal 2022 was the 21st consecutive year of a Federal budget deficit. Total U.S. Treasury debt at fiscal 2022 year-end was $30.9B. U.S. Treasury debt rose $8.5B in the three fiscal years ending in 2022. The Federal Reserve increased its holdings of U.S. Treasury debt by...

Summary Last week’s Federal Reserve meeting provided reinforcement for those anticipating slower rate hikes and a more stable bond market next year. Chair Jerome Powell seems to lean toward downshifting to 25-basis-point increases. Investors could see slower rate hikes from h...

Summary Demand destruction is weighing on prices globally as financial conditions tighten. The good news is that headline CPI is set to follow crude lower in 2023. This Wednesday, any dovish nods out of the FOMC could spark a year-end relief rally in risk markets. Demand d...

Summary The strong US dollar is creating havoc for other central banks, forcing the Federal Reserve to become less hawkish. Global energy market dynamics portend continued inflation strains, meaning interest rates may not peak soon. The Federal Reserve may not reduce interest ...

Summary The stock market has already endured a major correction over the past 12 months and could be headed back to pre-pandemic levels. The real estate market has been suddenly frozen by the rapid pace of the Fed's interest rate hikes. Home prices are now starting to drop and...

Summary With policy rates now meaningfully above neutral, the first phase of the tightening process is finished—and apparently successful. With the Fed’s credibility intact, it can move to a new phase: rolling out more rate hikes but at a slower pace. We expect t...

Summary The recent rise in real yields for inflation-indexed Treasuries (TIPS) looks compelling for locking in relatively attractive payout rates, but the usual risks with bonds still applies. History suggests that buying and holding this 50-50 mix is attractive when the sum ...

Summary Since the peak in early June, $196 billion in Treasury securities have rolled off the Fed’s balance sheet, reducing the balance of Treasury securities to $5.57 trillion, the lowest since November 17. Since the peak, the balance of MBS had dropped by $62 billion. ...

Summary The global economy has been hit by several headwinds, almost all of them leading back to higher inflation. Europe is likely already in recession, the U.S. will enter recession in Q2 2023, while China struggles to make recovery headway. Markets have faced up to the reality ...

Summary Barclays Aggregate is down almost as much as the S&P 500 YTD. As of 10/31/22, the YTD return on high yield is far better than the return on corporate high-grade. There is relative value being created in the various bond market asset classes. Looking at th...