Lately, clients have been asking us one question: how are longer-term bond yields moving higher when the Federal Reserve is cutting interest rates?
New Year, Same Fluctuating Economy
Fiscal Irresponsibility
We frequently receive questions from clients regarding the sustainability of U.S. government debt. According to the U.S. treasury, the American government has run a budget surplus only four times in the last 50 years, with the most recent being in 2001.
King Dollar
The U.S. government has endorsed a “strong dollar” policy for much of the last thirty years. Besides sounding much better than the alternative, this messaging has reminded markets that the U.S. dollar remains the world’s reserve currency, despite frequent projections of its demise or threats to its dominance.
Runnin' Down a Dream (of Tax Reform)
After eight consecutive days of positive returns, U.S. equities closed slightly lower Friday and finished the week up 1.10 percent. Emerging markets, up 2.75 percent, extended the lead as the best performing asset class of 2017 with a total return greater than 30 percent.
Changing of the Guard
The S&P 500 was up nearly 1 percent again this week as economic data continues to confirm a growing economy. An underwhelming jobs report on Friday took yields on 10-year U.S. Treasuries to a new low on the year of 2.15 percent.