VGLT News and Press, Vanguard Long-Term Government Bond ETF From 09/21/22

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 Markets did not like the August CPI increase over the number from July, which remained essentially unchanged, though a significant decline had been predicted. Outside of food and energy, the inflation picture is not much better. Price pressures appear to have increased...

Summary Although consumers are benefiting from robust labor markets and strong balance sheets, they appear reluctant to buy high-cost durable goods. A key to navigating inflation risk is understanding its relationship with asset class returns. Historically, high-inflation episodes...

Summary Federal Reserve is widely expected to lift its target interest rate by 75 basis points by Sep. 21. Question is whether the bond market has priced in the change. If the Fed hikes rate by 75 basis points, that will lift the target rate to a 3.0-to-3.25% range. In the sho...

Summary This week the Fed funds rate will likely rise above the prior Fed funds rate hiking cycle for the first time in 40 years or so. I am of the opinion that the Fed overly stimulated the economy in 2021 and now we are all paying the price for their past mistakes. It is thi...

Summary The consensus expectation on Tuesday for August CPI was for a 0.1% decline, but the positive +0.1% monthly gain in the CPI shocked Wall Street. This inflation news spooked Treasury bond yields, pushing 10-year yields up from 3.36% on Monday to 3.42% on Tuesday. Now tha...

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...

Summary The new regime of macro volatility is playing out with weaker growth, persistent inflation and volatile markets. We stick with our dialed-down risk stance. U.S. stocks slumped and yields surged on a renewed rise in core inflation. We’ve argued inflation will be pers...

Summary Nobody knows how high interest rates have to rise in order to slow and ultimately reverse the recent rise in inflation. Only excess money causes inflation, and there seems to be a lot less of it recently, which is great news. Supply chain bottlenecks are clearing up ra...