As expected, the U.S. government’s debt limit was reached today. Treasury Secretary Janet Yellen identified this situation in a letter to Congress last week
In 2022, short-term interest rates rose significantly. This was an obvious trend that captured many headlines throughout the year
Not surprisingly, the FOMC meeting last week resulted in another 75-basis point rate hike to the Fed Funds rate. Based on the Bloomberg Weighted Average forecast (shown in the graph below), the current market sentiment is that rates will continue to increase through the beginning of next year
This month the Federal Reserve raised interest rates again by 0.75%, and we continue to see significant increases in treasury rates, particularly on the front end of the yield curve. As a result, the treasury yield curve is now significantly inverted, as showcased in the chart below
The Federal Reserve raised interest rates again last week by 0.75%. Movements in the fed funds rate are closely related to short-term treasury rate movements. Historically and as shown in the graph below, the timing of increases to treasury interest rates has occurred leading up to (rather than following) the recent FOMC meetings when the fed fund rate hikes occur
The current market is allowing borrowers to realize significant interest earnings through the reinvestment of their debt service reserve funds. Because of the relatively flat yield curve environment the issue of negative arbitrage is diminishing and, in some cases, non-existent
Interest rates have risen dramatically over the last six months, especially at the short-end of the yield curve. Even though we’ve seen slight tapering in rates over the past several weeks, the yield curve continues to provide significant reinvestment opportunities for issuers
The current market continues to produce extremely volatile interest rates from week to week, day to day, and even intraday. Although such a volatile interest rate environment presents many disadvantages to all market participants, there can also be some advantages
The first increase in the Fed Funds rate since 2018 was anticipated by the market months before it occurred. This, combined with signals of further rate hikes from the Fed and both the uncertainty and the economic impacts surrounding the war in Ukraine, have caused interest rates to increase significantly from the historically lows seen in recent years
The Internal Revenue Service published its final regulations on January 4th for the LIBOR transition. There were several changes from their proposed regulations
