VTIP News and Press, Vanguard Short-Term Inflation-Protected Securities From 01/11/23

Summary On a short-term basis, gold, silver and mining stocks are looking overbought and in need of the pullback. The divergence between gold and real yields has again become pronounced, suggesting precious metals markets may have gotten ahead of themselves for the time being. Takin...

Summary A historic 2022 taught us to widen the lens of possible scenarios, factor in geopolitical risk and use a new playbook for more frequent portfolio changes. Global stocks ended the year down 18%, while bonds fell 16%. This marked the biggest market storm in decades amid inflation ...

Summary Treasury yields experienced a high level of volatility during the fourth quarter. Despite the volatility in equities, spreads on investment-grade corporates and taxable municipals dropped. Wider spreads and longer durations hurt our performance for most of the year, but that...

Summary TIPS performance could rival that of the S&P 500 over the next decade. TIPS can serve as a low-cost, do it yourself annuity for those near or in retirement. There are important differences between buying TIPS via a fund/ETF or a bond ladder. The ladder has several ke...

Summary While price inflation appears to be easing some, the data indicates it is far from whipped. At this point, you can spin the price inflation data either way. It is reasonable to think that price inflation will continue to cool. The bigger problem is that this “high...

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 Historical inflation data and the 1940s and 1970s experiences suggest next decade inflation may run considerably above the ~3% that consumers and investors expect. Bogle and CAPE models project S&P 500 returns of 4-7% over the decade, with a median of 5.5%. The highest r...

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...