What Does a Fed Tightening Mean for Equities?
... doves want to foster improvement in labor markets by leaving monetary accommodation as long as possible. With the Fed’s own economic forecasts consistently too optimistic, and inflation stubbornly below 2.0%, the Fed may end up keeping rates lower for longer, a refrain that we have heard often for p ...
... doves want to foster improvement in labor markets by leaving monetary accommodation as long as possible. With the Fed’s own economic forecasts consistently too optimistic, and inflation stubbornly below 2.0%, the Fed may end up keeping rates lower for longer, a refrain that we have heard often for p ...
No Slide Title
... INCOME INVESTING IN A GLOBAL DEBT CRISIS ROGER S. CONRAD AAII WASHINGTON 2012 ...
... INCOME INVESTING IN A GLOBAL DEBT CRISIS ROGER S. CONRAD AAII WASHINGTON 2012 ...
As Interest Rates Rise, Muni Bonds` Unique Characteristics Matter
... Though bond prices move in the opposite direction of yields, moves in fixed income markets may be driven less by the mere fact of higher rates than by whether or not investors expect rate hikes. Expected rate increases are typically priced into current valuations and markets typically respond to the ...
... Though bond prices move in the opposite direction of yields, moves in fixed income markets may be driven less by the mere fact of higher rates than by whether or not investors expect rate hikes. Expected rate increases are typically priced into current valuations and markets typically respond to the ...
Chapter 11 PPP
... Shape of yield curve is based upon investor expectations of future behavior of interest rates ...
... Shape of yield curve is based upon investor expectations of future behavior of interest rates ...
Broad Market Gains Power Historic Rally
... "We are in a Goldilocks-like age at the moment,'' said asset manager Jack Flaherty, referring to markets perceived as not too hot and not too cold—just right. Mr. Flaherty is head of U.S. fixed income at GAM, which has over $120 billion in global assets under management, At the same time, the price ...
... "We are in a Goldilocks-like age at the moment,'' said asset manager Jack Flaherty, referring to markets perceived as not too hot and not too cold—just right. Mr. Flaherty is head of U.S. fixed income at GAM, which has over $120 billion in global assets under management, At the same time, the price ...
Chapter Thirteen: Term Structure of Interest Rates
... 13.5.2 The preferred habitat theory of the term structure The preferred habitat or hedging pressure theory refines the liquidity preference theory to allow for differing preferences among lenders and borrowers with respect to the maturity of the bonds they hold or issue. The main implication of ...
... 13.5.2 The preferred habitat theory of the term structure The preferred habitat or hedging pressure theory refines the liquidity preference theory to allow for differing preferences among lenders and borrowers with respect to the maturity of the bonds they hold or issue. The main implication of ...
solutions
... 5. Describe an investment strategy using derivatives, which yields a positive payoff in case of low volatility and limited losses in case of high volatility. E.g., butterfly spread. 6. Is it possible for a pension fund to achieve perfect insurance against interest rate risk? If yes, how? This can b ...
... 5. Describe an investment strategy using derivatives, which yields a positive payoff in case of low volatility and limited losses in case of high volatility. E.g., butterfly spread. 6. Is it possible for a pension fund to achieve perfect insurance against interest rate risk? If yes, how? This can b ...
Bonds - Headwater Investment Consulting
... S&P rose 19.8% during the same time period. Rates for the 10-year treasury eventually topped out at just below 15% in 1982. Interest rates did not rise in a linear pattern; they had numerous spikes and pullbacks. During periods of rising rates, the S&P 500 was more likely to have positive returns th ...
... S&P rose 19.8% during the same time period. Rates for the 10-year treasury eventually topped out at just below 15% in 1982. Interest rates did not rise in a linear pattern; they had numerous spikes and pullbacks. During periods of rising rates, the S&P 500 was more likely to have positive returns th ...
OnPoint—Strategies to benefit from rising rates
... Source: Bloomberg. Past performance is no guarantee of future results. These charts are for illustrative purposes only and not representative of performance for any particular investment. These charts are for select time periods. Results over different periods would have varied. Indexes are unmanage ...
... Source: Bloomberg. Past performance is no guarantee of future results. These charts are for illustrative purposes only and not representative of performance for any particular investment. These charts are for select time periods. Results over different periods would have varied. Indexes are unmanage ...
Recent developments in long-term real interest rates
... long-term growth prospects in the major economies seem to have played a fairly minor role in explaining recent bond market developments. Despite market disappointment over fourth quarter real GDP growth figures in some euro area countries and a number of weaker than expected data releases, long-term ...
... long-term growth prospects in the major economies seem to have played a fairly minor role in explaining recent bond market developments. Despite market disappointment over fourth quarter real GDP growth figures in some euro area countries and a number of weaker than expected data releases, long-term ...
Too Much, Too Many - Goelzer Investment Management
... Since the start of the industrial revolution, people have worked to become proficient at mining, manufacturing, financing, and selling all types of goods. It became evident this past year that our proficiency has led, at least temporarily, to too much production. As a result, much of the world now h ...
... Since the start of the industrial revolution, people have worked to become proficient at mining, manufacturing, financing, and selling all types of goods. It became evident this past year that our proficiency has led, at least temporarily, to too much production. As a result, much of the world now h ...
19 - Commercial Real Estate Analysis and Investment
... Mkt expectations about what future short-run interest rates will be. Longterm yields must equal average of expected short-run yields over the horizon of the long-term bond maturity. Otherwise, arbitrage opportunities would be available (Buy/Sell across maturities) . Relates to: a) Inflation expectat ...
... Mkt expectations about what future short-run interest rates will be. Longterm yields must equal average of expected short-run yields over the horizon of the long-term bond maturity. Otherwise, arbitrage opportunities would be available (Buy/Sell across maturities) . Relates to: a) Inflation expectat ...
2017 IBA Mega Conference - Indiana Bankers Association
... • The TEFRA disallowance was established in 1982 which stipulated that institutions who buy Bank Qualified (BQ) Munis must apply a 20% disallowance of interest expense. For Sub S institutions (after 3yrs of conversion), there is no TEFRA disallowance on BQs. ...
... • The TEFRA disallowance was established in 1982 which stipulated that institutions who buy Bank Qualified (BQ) Munis must apply a 20% disallowance of interest expense. For Sub S institutions (after 3yrs of conversion), there is no TEFRA disallowance on BQs. ...
UST Curve: Belly`s too big
... negative territory as long as the Fed is biased towards higher policy rates. Over the past 15 years, there have been two notable periods where the spread was negative. The first was when the rate hike cycle was well underway in 2005/06; the second was when quantitative easing and dovish forward guid ...
... negative territory as long as the Fed is biased towards higher policy rates. Over the past 15 years, there have been two notable periods where the spread was negative. The first was when the rate hike cycle was well underway in 2005/06; the second was when quantitative easing and dovish forward guid ...
Fundamentals of the bond Valuation Process
... The relationship between maturity and interest rates. It is also known as the Yield Curve. Expectations Hypothesis suggests that the long-term rate is an average of the expectations of the future short-term rates over the applicable time horizon. Reinforced by borrower/lender strategies. ...
... The relationship between maturity and interest rates. It is also known as the Yield Curve. Expectations Hypothesis suggests that the long-term rate is an average of the expectations of the future short-term rates over the applicable time horizon. Reinforced by borrower/lender strategies. ...
Treasury Yield Curve (percent)
... The difference in yield between the 5-year and 10-year Municipal AAA MMD as well as the difference in yield between the 10-year and 30-year. These spreads measure the steepness of the yield curve as well as the yield pick-up for extending maturity. A normal yield curve (positive) occurs when longer- ...
... The difference in yield between the 5-year and 10-year Municipal AAA MMD as well as the difference in yield between the 10-year and 30-year. These spreads measure the steepness of the yield curve as well as the yield pick-up for extending maturity. A normal yield curve (positive) occurs when longer- ...
Yield curve
In finance, the yield curve is a curve showing several yields or interest rates across different contract lengths (2 month, 2 year, 20 year, etc...) for a similar debt contract. The curve shows the relation between the (level of) interest rate (or cost of borrowing) and the time to maturity, known as the ""term"", of the debt for a given borrower in a given currency. For example, the U.S. dollar interest rates paid on U.S. Treasury securities for various maturities are closely watched by many traders, and are commonly plotted on a graph such as the one on the right which is informally called ""the yield curve"". More formal mathematical descriptions of this relation are often called the term structure of interest rates.The shape of the yield curve indicates the cumulative priorities of all lenders relative to a particular borrower, (such as the US Treasury or the Treasury of Japan) or the priorities of a single lender relative to all possible borrowers. With other factors held equal, lenders will prefer to have funds at their disposal, rather than at the disposal of a third party. The interest rate is the ""price"" paid to convince them to lend. As the term of the loan increases, lenders demand an increase in the interest received. In addition, lenders may be concerned about future circumstances, e.g. a potential default (or rising rates of inflation), so they offer higher interest rates on long-term loans than they offer on shorter-term loans to compensate for the increased risk. Occasionally, when lenders are seeking long-term debt contracts more aggressively than short-term debt contracts, the yield curve ""inverts"", with interest rates (yields) being lower for the longer periods of repayment so that lenders can attract long-term borrowing.The yield of a debt instrument is the overall rate of return available on the investment. In general the percentage per year that can be earned is dependent on the length of time that the money is invested. For example, a bank may offer a ""savings rate"" higher than the normal checking account rate if the customer is prepared to leave money untouched for five years. Investing for a period of time t gives a yield Y(t).This function Y is called the yield curve, and it is often, but not always, an increasing function of t. Yield curves are used by fixed income analysts, who analyze bonds and related securities, to understand conditions in financial markets and to seek trading opportunities. Economists use the curves to understand economic conditions.The yield curve function Y is actually only known with certainty for a few specific maturity dates, while the other maturities are calculated by interpolation (see Construction of the full yield curve from market data below).