STIP News and Press, iShares 0-5 Year TIPS Bond From 11/29/21

We stay invested for now as a new virus strain and European COVID surge are hurting risk sentiment. Any delay of the powerful restart now means more later. News of the contagious new strain triggered a sell-off in risk assets. Jerome Powell was nominated to stay on as Fed chair, heral...

The S&P 500 was down 2.2% last week, which, in normal times, would be barely worth a mention. But in today’s speculative market, that qualifies as a correction. The first two quarters of this year were a big rebound, but last quarter was a bummer with the emergence of the D...

Most central bankers appear to attribute the elevated inflation prints (at least partially) to global supply chain bottlenecks and associated scarcity of supply. Looking over the cyclical horizon, we see two key swing factors – inflation expectations and wages – and they...

At the November FOMC meeting, the Fed officially announced that it would begin tapering its bond purchase program, starting in mid-November. When the Fed began tapering its QE3 program over the course of 2014, the coupon supply from the U.S. Treasury was stable, leading to an increase...

We had a blowout CPI print in the United States last week. Forward breakeven inflation rates have risen since the pandemic lows but are still not above the levels seen in the early 2010s. If people were really worried about inflation, they would be bidding up protection versus fai...

With the Q4 rebound on track and services picking up to offset some of the expected slowdown in goods spending and the announcement by Pfizer of an effective anti-viral for COVID, why did bonds rally? Why did interest rates fall so hard on Friday after the payroll report? Some said th...

For the five year five year forward inflation expectations inferred from market rates, there was a 27 bps jump going from 9/23 to 10/15, before retracing back to prior levels at end-October (and subsequently rising again). Kim, Walsh and Wei compare their implied expected inflation ra...

A strengthening greenback is consistent with previous Fed tapering episodes as shrinking Q.E. injections mean fewer dollars swirling around the globe. A rising dollar makes these critical imports more expensive for other countries, suppressing demand while producers ramp supply. A...

Central bank policy makers appear to have a higher tolerance for inflation than in previous cycles, even more so because of QE. It is worth adding a note of caution when looking at breakevens. There is a massive mismatch between the supply of inflation linked bonds and the demand for ...

The recent run higher in the Sharpe ratio for the Global Market Index finally reversed in October. Risk-adjusted performance has slipped, but GMI's rebound in October lifted it to a new record high. GMI is useful as a baseline to begin research on asset allocation and portfolio de...