Train Spotting

My first boss told me something years ago about the bond market that I’ll never forget. He said, “never stand in front of a moving train.” I think about it every time I trade. He meant that if interest rates (the train) start to move quickly in one direction and…

Headwinds

The second quarter of 2018 revealed little news in the bond market, as the generally range-bound trading that marked previous quarters remained in place. On May 11th, the yield on the 10-year U.S. Treasury bond reached 3.11 percent, and it appeared that interest rates were headed higher on the back…

A new interest rate regime

As 2017 began, bond investors speculated on the impact of the new administration’s policies. How inflationary might lower taxes, deregulation and a big infrastructure bill be for the U.S. economy? The first quarter spike in 10-year Treasury rates (shown below) indicated that the bond market was expecting big increases in…

The two-year has broken through to the other side

Have we finally begun seeing the normalization of interest rates in U.S. Treasuries? Although we’ve seen sudden rises in interest rates before, we haven’t seen a precipitous rise like we’ve seen in the last month. Although we often focus on the ten-year Treasury as the barometer of interest rates, the two-year Treasury is our focus at this point.…