Five years ago, dire predictions were a dime a dozen. It was, after all, a very scary time fraught with uncertainty. Amid all of the dreadful forecasts, one bothered me a lot less than the others: the US dollar would collapse leaving Americans pushing around wheelbarrows of worthless cash in order to buy just one loaf of bread like in Germany’s Weimar Republic. The idea was that the Federal Reserve… Read More
The fireworks started a day early on Thursday with the Bureau of Labor Statistics announcement that employment increased by 288,000 in June and that the April and May numbers were revised upward by a combined 29,000 jobs. June marked the fifth month where more than 200,000 jobs were added per month and averaged more than 250,000, a streak that we haven’t seen since the late 1990s. Furthermore, the unemployment rate… Read More
ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: Remember The Taper Tantrum? What’s My Duration? Bond Sector Performance
On Friday, the Bureau of Labor Statistics announced that the economy added 217,000 jobs to the payrolls in May, which actually brings the number of jobs to levels not seen since before the recession in 2007. The chart below shows just how long it took it took to get back all of the jobs that were lost – a staggering six and a half years. The chart demonstrates that the… Read More
The Bureau of Economic Analysis (BEA) released their second estimate of Gross Domestic Product (GDP) yesterday for the first quarter of this year. Initially, the BEA reported the economy grew by an annualized rate of 0.10 percent, which was a fairly bad print. The cold winter shouldered a lot of the blame, but it also seemed like the economy would have slowed down anyway even if the winter had been… Read More
A few weeks ago when Federal Reserve Chair Janet Yellen testified before Congress, she said that ‘readings on housing activity, a sector that has been recovering since 2011, have remained disappointing so far this year and will bear watching.’ Since the World War II, residential housing activity has been about 4.75 percent of gross domestic product (GDP). During the bubble that hare increased to about 6.4 percent, cratered to two… Read More
ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: The Plan to Wind Down Fannie and Freddie Economic Analysis – Fed Digests Mixed Data Bond… Read More
Markets were slightly higher on Friday despite the surprisingly weak employment situation that was well below expectations. Bonds rallied sharply on the report with the yield on the 10-year US Treasury bond dropping almost one tenth of one percent, from 2.97 percent to 2.88 percent on Friday.
US stock markets were almost absolutely flat yesterday, as seen investors digested the Federal Open Market Committee (FOMC) December minutes. Recall that this was the meeting where the Fed decided to slow down their monthly bond-purchasing program to $75 billion per month, so the minutes were particularly interesting. There were no major surprises (hence the stock markets collective yawn), but it was good to see that there was widespread… Read More
