Fed officials will likely cut rates again on Wednesday, moving the Fed Funds rate to a range between 4.25 and 4.50. We think the Fed wants to get this rate between 4.00 and 4.25, but with inflation turning up, the timing of their next move may be in question. Perhaps a long pause is warranted. […]
The current Federal Funds rate is 5.375. This is up from .125 in March of 2022. In short, the Fed pays financial institutions this rate on their cash balances and thus it serves as the benchmark for all highly rated money market yields, including short T Bills. The Federal Reserve has indicated that their fight […]
Our clients have been heavily invested in US T Bills at yields north of 5%. We continue to believe this is a good place to be invested until we have a better picture of US inflation and the Fed’s future interest rate plan. Complicating matters are the Debt Ceiling limits and China/Russia’s expansionary tendencies. Both […]
We believe that wage and commodity inflation will remain sticky, and the Fed will continue to tighten rates to at least 5.25%. The curve is steeply inverted, and the markets believe that the Fed will start easing in the second half the year (we are not so sure). Six moth T Bills yield close to […]
Here are the 2022 returns and closing yields for these Bloomberg Bond Indices. As you can see, every Index was down, and longer duration Indices were down the most. The average ASA client returned a positive 1.39% net in 2022.
This week, Fed Chairman Powell reiterated the Board’s commitment to flight inflation. In addition to the Chairman, a number of other Board members independently spoke to the same tune and their tune is all pointing to higher Fed Funds rates sooner and for longer. The markets are now pricing a 75 bpt hike on 9/21 […]
Congress and the Fed have combined to create an unstable situation by pumping trillions of dollars into the financial system with nowhere in the real economy for it to go: This has created a record asset bubble ….and unsustainable inflation. Despite the President’s assertions, the recently-passed infrastructure spending bill is unlikely to do anything but […]
As Transitional Funding Partners is an asset-based lender primarily, we are regularly taking stock of asset valuations. Our main collateral asset class is real estate – commercial and high-end residential. Hence, looking at a generic index like the National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index is instructive as it tracks changes in […]
Based on the number of assets, the US money market fund industry appears healthy. With more than 4.5 trillion dollars in US money market funds all looks very well…at least on the surface. The three primary types of money market funds include Government, Corporate (Prime), and Municipal. From an investors standpoint, the yields are historically […]
The CPI Index is heavily weighted to four categories in large urban areas Housing, Food, Transportation, and Medical costs comprise over 80 percent of the CPI Index. The survey concentrates on areas most affected by the pandemic and urban unrest (urban concentration). Housing prices in these areas do not accurately reflect what is happening in […]