Jon Smith, of DT Investment Partners, discusses the effect of an interest rate
hike on bond markets... see why we prefer individual bond holdings over engineered ETFs in this environment.
David Kotok, chairman at Cumberland Advisors, discusses the Fed's policy path next year, the impact of the rate
hikes on the bond market and his outlook for 2016.
Not exact matches
Bond prices were higher, stocks waffled and the dollar flip - flopped after the Fed's post-meeting statement failed to deliver the clarity
markets were looking for
on the course of rate
hikes.
Separately, they also argued that
bond yields are the «Achilles» heel of global
markets,» arguing that «
market pricing
on Fed rate
hikes, however, remains modest and there is to our minds significant risk of a more disorderly repricing of global
bond yields.
yields will hit the highs
on close end of the day... equity
markets setting up to be slammed tomorrow maybe but today they have run over weak shorts in the face of rates... the federal reserve see's this and again will wonder if they are behind
on hikes, strong data, major expansion in credit, lack of wage growth rising
bond yields and ballooning debt... rates will go much higher and equities will have revelations as to what that means for valuations
That certainly was the
market reaction this morning, as the 10 - year
bond yield spiked
on the report, suggesting concerns about future inflation and a more aggressive rate -
hike schedule at the Fed.
Despite the mainland's capital controls, its
bond market joined the global
market ructions
on Thursday after the U.S. Federal Reserve surprised by saying it expected to
hike interest rates three times next year, rather than the previously forecast two
hikes.
While we agree with Alankar that bringing back
bond market term premium would restore balance to the financial system, the ineffectiveness of using rate
hikes to push up term premium is evident by the
on - going curve flattening
I know some
market participants are taking the view that inflation will remain weak and further rate
hikes will invert the curve, cause a recession, and we will see even lower yields
on long term
bonds.
The US Fed indicated further moves would be dependent
on global factors and oil prices — a key detail signifying that future rate
hikes seem likely to develop
on a slower scale, causing a European government
bond market rally
on Thursday, sending yields lower in the region.
Bond market traders, who are the most likely to put their money where their forecasts are, are currently wagering
on a rate cut in the next year rather than a rate
hike.
As usual, yen pairs were taking directional cues from
bond yields, so the yen got swamped by sellers
on Monday when
bond yields rose, due to the prevalence of risk - appetite and expectations that the FOMC minutes will show that a December rate
hike is still in the cards,
market analysts say.
The majority of global equity
markets have posted negative returns,
bond yields are near record lows, the loonie has fallen to levels not seen in over 11 years, and, to top it all off, there are some steep tax
hikes on the immediate horizon.