2 min readStrong Year for the Markets After trending down on Tuesday morning, markets reversed course and closed the year on a high note. While they were off their December all-time highs, the S&P 500 and Nasdaq posted their best yearly performances since 2013, rising 28.9% and 35.2%, respectively, while the DJIA had its best year since…
2 min readFinal FOMC Meeting of 2019 The Federal Reserve met on December 11th and, as expected, left rates unchanged at the 1.50% to 1.75% target range. The FOMC signaled that it has little appetite for adjustments to monetary policy in the near term, saying “the current stance … is appropriate to support sustained expansion of economic…
2 min readIn a move that was widely expected, the Federal Reserve cut rates last Wednesday by 25 basis points to the 1.50% to 1.75% range. Seven officials voted for the cut, and two (Esther George and Eric Rosengren) dissented again in favor of no change in monetary policy. Because the rate reduction had been anticipated, the…
4 min readIn a move that surprised no one, the Federal Open Market Committee (FOMC) cut rates by 25 basis points at its October meeting, the third cut in as many months. The current Federal Funds rate range now lies at 1.50%-1.75%, still relatively high compared to short-term rates in other G8 economies and still well off…
2 min readEverchanging speculation on tariff war developments continues to drive bond market volatility as well as projections on potential interest rate cuts. Earlier this month, a mini-deal between the Trump administration and Chinese officials buoyed market sentiment when additional tariffs slated for implementation in December were delayed and China agreed to buy additional US agricultural products….
5 min readThe interest rate blues are well in effect. For those with enough foresight to see this coming (and thus to load up on long-duration Treasury bonds) it has been an absolute riot. For the rest of the fixed income investment community, it’s been a bit of a bloodbath. Figure 1: Yield Curve Source: Bloomberg Over…
5 min readThis past week saw some nearly unprecedented chaos in repo markets. Beginning late Monday and extending into Tuesday morning, funding in overnight cash markets essentially dried up, sending investors scrambling for liquidity. This resulted in a surge in repo rates for those who did transact, with overnight rates jumping from the low-to-mid 2% range to…
3 min readToday, the Federal Open Market Committee announced a 25 basis point cut in the overnight fed funds rate to a range from 1.75% to 2.00%, the second such action this year. In a normal week, building anticipation for the Fed’s policy decision and press conference would typically dominate the markets, but turmoil in the repo…
7 min readAs a registered investment advisor whose sole focus is on cash investments, Capital Advisors Group has a very clear mission: to make sure the strategies we develop for our clients comply with their investment policies, risk tolerance, and current business situation. Under the Investment Advisers Act of 1940 which governs SEC registered investment advisors, we…
2 min readWhen a multi-billion-dollar rate-fixing scandal in 2012 undermined confidence in LIBOR as the standard global benchmark for interest rates on short-term debt, regulators from the U.S. and U.K. started searching for a suitable replacement. A lot was riding on the choice: more than $200 trillion in floating-rate bonds, derivatives contracts, securitizations, and loans around the…