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Beware the Rising Treasury Yield
Could rising U.S. Treasury yields blunt the economic recovery that has helped push the rates higher?
Yields on U.S. Treasury securities have soared over the past six months as the U.S. economy showed signs of a rebound and as investors braced for the possible return of inflation. However, while the higher yields signaled improving fortunes for the American marketplace, those higher rates could also undermine this turnabout by causing the improving stock-and-housing markets to stumble.
From its low of 2.04% in mid-December, the yield on the 10-year Treasury has surged past the 3.83% level.
At first blush, it makes sense for Treasury yields…
10Jun2009 | Money Morning | 1 comment | ContinuedVanishing Jobs and Rising Bailout Costs
While The DJIA Hits Key Resistance
Last week we discussed the prospect of rising job losses and last week’s November payroll report confirmed the phenomenon. The consensus amongst economists was that there would be 350,000 jobs lost. They were wrong, though: The actual number was a lot closer to 550,000 instead.
Even though the Dow continued to rally into this depressing news, a daily chart tells us that a veritable moment of truth has arrived:
The DJIA has tried and failed to clear its 50 day moving average. The 9000 level has proved to be serious resistance previously, and now that ominous blue…
12Dec2008 | Oxbury Research | 0 comments | ContinuedThe Treasury Department is Choking on Debt, But You Don’t Have To
The U.S. Treasury Department announced Nov. 3 that it intended to borrow a record $550 billion in the fourth quarter. That represents a staggering $408 billion increase over Treasury’s borrowing estimate from early August and includes $260 billion for the recapitalization of U.S. banks.
Make no mistake about it: There will be enough U.S. Treasury bonds to choke on, as the government tries to finance this debt.
In the three months to Sept. 30, the Treasury Department borrowed $530 billion; in the first quarter of the New Year – which ends March 31 – it expects to borrow $368 billion. The…
7Nov2008 | Money Morning | Comments Off | Continued
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