VTIP News and Press, Vanguard Short-Term Inflation-Protected Securities From 10/24/22

Summary I have said for weeks that the Fed needs to slow the pace of its tightening campaign. Powell apparently decided last week that the market was taking things too far. Corporate earnings are being released for the quarter and, so far, they aren’t that bad. It w...

Summary As I've argued in recent posts, there's plenty of evidence to suggest the Fed has already tightened by enough to bring inflation down. The dollar is super-strong, real yields have risen sharply, the yield curve is inverted, commodity prices are plunging, and the housing ma...

Summary Stocks started the week waiting with bated (baited?) breath for the inflation reports of the week. It isn’t surprising that the market is focused firmly on the rearview mirror for clues about the future since Jerome Powell has made it plain that is his plan. Sto...

Summary We’re underweight government bonds because yields have room to move higher, and we don’t think they can be a safe haven when recession comes. Stocks were choppy and short-term U.S. Treasury yields jumped after data showed persistent U.S. core inflation. We th...

Summary U.S. recession risks are rising and stagflation may be poised for a comeback. A strong job market has kept us from entering such an environment, but recession risks are rising as the Federal Reserve has vowed to maintain a restrictive monetary policy to rein in inflation -...

Summary Discordant is the best way to describe the markets right now. Under the backdrop of leading central banks rolling out opposing policies, markets have been rising and falling every alternate date. Well, according to the Street, there are some notable flow trends that have e...

Summary The one year I Bond yield of 8.1% may well be the last huge pop in the inflation component as the October 21-April 22 return of 4.81% disappears on November 1. This reset may be a turning point and the last chance to double up (or more) to get a huge one-year return before...

Summary Financial markets are highly liquid and far from breaking down. Since a strong economy is going to be tough to come by these days, high real rates confirm that money is very tight. The interest cost of our federal debt is less than 3% of GDP, and that's relatively low ...

Summary The Fed had paved the way for a major inflation problem during the first half of 2020 - a problem that became blatantly obvious in 2021. The equity bubble has burst, the US economy has entered or is about to enter recession territory, commodity prices have set intermediate...

Summary A critical factor contributing to the market's downward trajectory this year is the high level of inflation and the Fed's higher interest rates. The pandemic and the related shutdowns create a unique environment making it difficult to interpret some of the recent economic ...