Federal Reserve Rate Decrease

Posted by:

The U.S. Federal Reserve (the Fed) had been gradually ratcheting up the federal funds rate, until it reached its December 2018 level of 2.25–2.50%. On August 1, 2019 that changed when the Fed lowered the federal funds rate by a quarter point, to 2.20–2.25%. Even though the announcement was not a huge surprise, it was the first rate decrease since the thick of the 2008 Economic Crisis. As such, the move is receiving wide media ...

Continue Reading →
0

What Is the Yield Curve?

Posted by:

… the Treasury yield curve continues to flatten—historically, a harbinger of a slower economy. The spread, or difference, in the yields of the Treasury’s two- and 10-year notes, to under 20 basis points, is the smallest since July 2007…  Barrons Up & Down Wall Street Column 8/27/18

 The yield curve is flattening (or growing steeper)! … Yield curve spreads are widening (or narrowing)! … The yield curve has inverted (or normalized)!

Headline-grabbing yield curve commentary somehow sounds important, ...

Continue Reading →
0

Fixed Income Investing: Avoid Chasing Yield

Posted by:

yield curve

In a recent Financial TIP series, “Investing for Retirement Income,” we covered the reasons why we do not recommend fully shifting into high-yield (“junk”) bonds or dividend-yielding stocks when higher-quality bonds aren’t delivering as hoped for. Rather than stretching for extra yield with stand-alone solutions, we typically suggest taking a total-return approach, seeking an appropriate risk/reward balance among all sources for ...

Continue Reading →
0

Is Yellen Moving on Up

Posted by:

The U.S. Federal Reserve (the Fed) has held the federal funds rate at nearly zero percent, seeking to bolster an ailing economy in the aftermath of the Great Recession since December 2008. Economists agree that the position is unusual, and highly unlikely to go on forever – drastic times called for drastic measures. Then again, they’ve been agreeing on that for seven years. Each year, the Fed has had opportunities to ease into rate increases, and they ...

Continue Reading →
0