83.29 0.00 (0.00%)
After hours: 4:00PM EDT
|Bid||83.26 x 200|
|Ask||83.29 x 200|
|Day's Range||83.27 - 83.31|
|52 Week Range||83.27 - 84.72|
|PE Ratio (TTM)||95.96|
|Expense Ratio (net)||0.15%|
US bond markets’ relief after a dovish FOMC statement was short lived as geopolitical tensions took center stage. US bond yields rose along the curve dominated by a sharp increase in yields at the short-end of the curve, which reignited fears of the yield curve flattening. The 2s10s spread has now reduced to 45 basis points and the 2s30s spread has been reduced to a fresh cycle low of 66 basis points.
As traders turn risk-off in response to escalating trade war tensions, investors have been diving into safety bets like Treasury bonds and related ETFs. A weekly data compilation by Bank of America Merrill ...
During his keynote at the tenth conference organized by the International Research Forum on Monetary Policy in March 2018, Boston Federal Reserve president Eric Rosengren said that the United States has been lagging behind some European economies (VGK), which are building excess fiscal policy buffers by following austerity measures. Recently, the Trump administration has announced tax cuts for businesses and individuals and proposed increased spending, adding to the fiscal deficit. Total US debt has now surpassed $21 trillion and it is expected to increase further as the government deficit is likely to balloon in the months ahead.
Do We Have the Tools to Combat a Recession? In his keynote delivered at the tenth conference organized by the International Research Forum on Monetary Policy in March, Boston Federal Reserve president Eric Rosengren highlighted US policy tools’ deficiency in combating another recession. Speaking about the monetary policy tools, he said that the current level of US short-term interest rates (SHY) leaves little room for them to be lowered during an economic slowdown.
In March 2018, Boston Federal Reserve president Eric Rosengren delivered the keynote at the tenth conference organized by the International Research Forum on Monetary Policy. The discussion aimed to analyze if the US economy was equipped with the policy tools to combat a recession. Rosengren repeatedly cautioned the audience that he was not predicting a recession anytime soon, though wanted to highlight that it is the right time to prepare for any future slowdown.
The US bond markets were relieved last week after the FOMC’s (Federal Open Market Committee) statement regarding its 0.25% rate hike sounded more dovish than expected. This forecast came as a relief to the bond markets, which had been reeling from fears about rising bond yields. The two-year bond yields declined for the first time in many months in response to the FOMC statement. The Vanguard Total Bond Market ETF (BND) ended the previous week at $79.52, depreciating by 0.01% for the week ended March 23.
As the growth outlook strengthens and the Federal Reserve responds with a tighter monetary policy, bond ETF investors will have to adapt to the changing market environment. “Tax cuts and plans for more ...
The US bond markets moved marginally higher in the previous week as investors’ worry about rising bond yields fell after the February inflation print showed stable growth. The Vanguard Total Bond Market (BND) ETF, which tracks the performance of the bond markets, ended the previous week at 79.5, appreciating by 0.26% for the week ending March 16.
Exchange-traded funds that track U.S. Treasurys have struggled thus far in 2018, with investors retreating from the sector—particularly bonds with longer durations—as fears over inflation and higher rates ...
The US bond markets were the only asset class that failed to rally after the February jobs report was released on March 9, 2018. The bond market, however, suffered further losses as every other segment of the jobs report pointed to a strong employment market, leaving the bias tilted toward further rate hikes. Rising rates are negative for the bond market, and investors holding these bonds tend to lose their asset value.
A rapid increase in short-term Treasury yields could renew investor interest in these bonds and related exchange traded funds, such as the iShares Short Treasury Bond ETF (NASDAQ: SHV). SHV tracks the ...
Financial markets have witnessed an abrupt change in their approach to bond markets over the past two months. Up until the end of 2017, markets were not convinced that inflation could rise according to the Fed’s expectations, and so long-term rates (TLT) did not rise in tandem with short-term rates (SHY), leading the yield curve to flatten. Then the employment report for January indicated that worker wages had increased more than expected, which allowed the chance for inflation to rise.
The intensity of recent volatility captured the top spot on the list as investors ponder a return to the markets. Technology stocks have recouped most of the losses from the start of the month, while the signed bill that grants a hike in military spending continued to drive interest towards the aerospace & defense sector. The recent sharp rise in government bond yields also caught attention as well as high-yield bonds, which trended thanks to a growing desire to diversify away from more volatile assets.
The US Federal Reserve has accumulated huge quantities of fixed-income (BND) securities as part of its three quantitative easing programs, QEs 1, 2, and 3. The balance sheet cuts should remain the same at 60% for Treasury securities (TLT) and 40% of mortgage-backed securities (MBB). Over the last decade, the US government was able to borrow at ultra-low interest rates, and the Fed was one of the biggest buyers.
The US Treasury manages the US government’s payments, and whenever there’s a shortfall in meeting expenses, the Treasury borrows and pays interest. When the tax revenue falls or the expenditure increases more than expected, the US Treasury could be forced to borrow more. Over the last 15 years, since the beginning of the “War or Terror” in 2002, government expenditure has increased because of military expenses.
A government budget deficit occurs when an economy’s annual revenue is less than its total expenditure. For fiscal 2019, the US Congressional Budget Office estimates the US budget deficit at $985 billion, where the expected revenue stands at $3.422 trillion while the budgeted expenditure was $4.407 trillion. The government spending is divided into mandatory and discretionary spending.
In this annual letter to shareholders, Warren Buffett explained a bet between him and his counterpart, Protege Partners, to fund a charity, Girls Inc. of Omaha. In 2007, both of them invested in half a million worth zero-coupon bonds (SHY) that would mature in ten years and would increase to $1 million. A zero-coupon bond does not bear any interest, but it is sold at a discount to compensate for interest.
Are bond bulls emerging from their hideouts? The US bond markets managed to gain some lost ground as bond bulls reemerged. The key focal point of bond traders was the FOMC meeting minutes, where the FOMC members were concerned about inflation, but they weren’t sure about inflation drastically increasing.
The Fed's 9+ year low-rate policy has damaged capital market understanding. As a result, the analysis we read daily is flawed by seven common errors.