VGLT News and Press, Vanguard Long-Term Government Bond ETF From 10/03/22

Summary The new regime poses an unavoidable trade-off for central banks: tame inflation by hiking or preserve growth. We see them overtightening rates, so keep risk low. UK gilt yields reached 14-year highs before the Bank of England intervened to halt the selloff. Yields on 10-ye...

Summary YTD, the S&P 500 is now down 24% while bonds have their own double-digit losses. Like stock valuations, currency valuations aren’t great timing tools but over a 3-year period after becoming undervalued, the outperformance is strong. Consumer defensive stocks...

Summary The Great Financial Crisis taught us about the extraordinary capacity of central bank balance sheets and fiscal authorities to absorb financial shocks and mitigate the effect of massive deleveraging. The politicians and monetary policymakers have become too used to their s...

Summary A rational extraction of market expectations from the US Treasury yield history since 1962 shows an upward shift this week. Both forward rates and expected future yield levels are up from last week, with the expected range for 3-month Treasuries in 10 years up to 1% to 2%....

Summary Markets again find themselves in a position where technical factors, positioning and sentiment suggest this sell-off may be overdone and a short-covering rally due. Tactical traders may well be rewarded for reducing hedges and short positions. However, until the fundam...

Summary When perceived or actual risks around corporate solvency and liquidity emerge, segments of the corporate bond market reprice lower, at times dramatically so. Spreads and volatility are related and tend to broadly move together. The year-to-date change in corporate bond...

Summary Money supply growth fell again in August, dropping to a 36-month low. Money supply growth tends to begin growing again before the onset of recession. Another indicator of recession appears in the form of the gap between M2 and TMS. When the difference between M2 an...

Summary It’s clear to see that the 30-year yield has decisively broken out of its downtrend channel. The bond vigilantes have finally been woken from their long slumber by rapidly rising inflation. It appears the bond vigilantes may throw a wrench in the Fed’s pl...

Summary After a series of hikes, the Fed’s short-run interest rate target lies between 3.0 and 3.25 percent. The problem with Fed policy isn’t excessive tightness, it’s excessive inscrutability. Don’t expect a smooth ride, let alone a soft landing, ...

Summary While the focus has been on Fed Funds Target range in wake of last week’s FOMC meeting, there is also another component to this query: the Treasury 10-Year yield. The Fed certainly made headlines at the just completed September FOMC meeting with their internal proje...