Articles Tagged: term premium

5 articles found

If Washington Goes Dark: How a Shutdown Data Blackout Could Scramble Fed Timing, Markets and Rate‑Cut Bets

The clock is running down on Capitol Hill, and with it the flow of the economic data that underpins Federal Reserve policy. If Congress fails to fund the government, a broad shutdown would trigger a "data blackout" from key statistical agencies—potentially sidelining the monthly jobs report, consumer inflation gauges and national income data just as the Fed navigates a shifting balance of risks. Markets are already bracing: consumer confidence has slipped to a five-month low and the Job Openings and Labor Turnover Survey (JOLTS) may stand as the last labor snapshot for weeks. A blackout would not just inconvenience forecasters. It would complicate the Fed’s data‑dependent reaction function ahead of its October and December meetings, force investors to lean harder on private proxies, and likely widen uncertainty premiums across rates and risk assets. Below, we map what turns off and what stays on, why it matters for the Fed, how markets may reprice cuts in a fog of missing data, and the practical playbook investors can use if official statistics go dark.

government shutdowndata blackoutFederal Reserve+17 more

What Bond Markets Are Saying About the Fed: Yield Curve, Inflation Signals, and a Playbook for Investors

U.S. bond markets have pivoted in the wake of Chair Jerome Powell’s Jackson Hole remarks, with the Treasury curve re-steepening as front-end yields drift lower and long-end term premium re-emerges. As of August 22, 2025, the 10-year Treasury yield is 4.26% and the 2-year is 3.68% (U.S. Treasury), putting the 10s–2s spread near +58 basis points, per FRED’s T10Y2Y. Market-implied inflation remains anchored: the 5-year breakeven is 2.48% and the 10-year is 2.41%, while the 10-year TIPS real yield is about 1.94% (FRED). The effective federal funds rate stands at 4.33% for July (FRED), still restrictive by historical standards. Equities have responded with improving breadth and lower volatility, and long-duration bond proxies have stabilized as real yields level off (Yahoo Finance).

yield curveTIPSbreakevens+16 more

The Labor Market’s Slow Rebalancing: Wage Disinflation Meets a Normalizing Yield Curve

The multi-asset snapshot now points to a cooler but resilient growth backdrop with disinflation traction and a yield curve that has turned positively sloped. As of Friday’s close, SPY was 643.44 and QQQ 577.34, with DIA at 449.53 and IWM at 227.13; developed ex-U.S. (EFA) sat at 92.19 and EM (EEM) at 49.94, according to Yahoo Finance. Treasury yields reflect a normalized curve: 2Y 3.75%, 5Y 3.85%, 10Y 4.33%, and 30Y 4.92% (U.S. Treasury, 2025-08-15), leaving 2s10s at +58 bps and 2s30s at +117 bps. Market-based inflation expectations remain anchored with 5y breakeven at ~2.42%, 10y at ~2.38%, and 5y5y forward near ~2.34% (FRED). Headline PCE inflation was ~2.6% YoY in June, with core PCE ~2.8% YoY, and CPI in July at ~2.7% (core ~3.0%) (FRED/BEA). The unemployment rate is near 4.2% with prime-age employment still elevated and wage growth easing toward high-3%s (BLS/FRED). Volatility is subdued in equities (VIX ~15–16) but episodic in rates (MOVE recently eased after spikes) per Yahoo Finance and FRED. The July FOMC statement emphasized balanced risks and data dependence; the SEP medians still show disinflation progressing toward 2% and the policy rate drifting toward the mid-3s over the next two years (Federal Reserve/FOMC).

labor marketwage disinflationyield curve+15 more

Intel Stock Outlook: Policy Tailwinds vs. Execution Headwinds in an AI-Centric Cycle

As of Thursday, August 14, 2025 (4:00 pm ET), Intel (INTC) closed at $23.86 with an implied market capitalization of approximately $99.13 billion (per Yahoo Finance and FMP). Broader risk appetite was firm: SPY $644.95, Nasdaq Composite 21,710.67, and SOXX $254.14, while the VIX slipped to 14.51 (Yahoo Finance). Semis leadership remained concentrated in AI bellwethers: Nvidia (NVDA) $182.02, AMD $180.95, and TSM $241.00 (Yahoo Finance). Rates context as of August 14, 2025 shows a normalizing, upward-sloping curve: 2Y 3.74%, 5Y 3.82%, 10Y 4.29%, 30Y 4.88%, with the 2s10s spread at +55 bps and 3M–10Y roughly flat (−0.01 bps), signaling transition from deep inversion (U.S. Treasury). Market-based inflation metrics are anchored: the 10-year breakeven is 2.39% and 10-year TIPS real yield 1.87% (FRED). High-grade and high-yield credit spreads remain supportive at ~0.78% (IG OAS) and ~2.90% (HY OAS), respectively (FRED).

IntelINTCsemiconductors+16 more

The New Shape of Risk: Treasury Yields, a $36 Trillion Debt Load, and How Trade Policy Could Tilt the Curve

On August 7, 2025, the U.S. Treasury 10-year yield closed near 4.23% while the three‑month bill yielded about 4.32%, leaving the very front of the curve still fractionally inverted even as the 2‑to‑10‑year spread has turned positive. That kinked profile underscores a hinge moment for U.S. rates: policy is easing from last year’s peak, but term premiums and fiscal arithmetic are anchoring longer maturities higher. Federal debt stood around $36.2 trillion as of January 1, 2025, according to Federal Reserve Economic Data (FRED), while nominal GDP ran near a $30.3 trillion annualized pace in the second quarter, a combination that keeps debt sustainability and term premium in focus. With the unemployment rate at 4.2% in July and the effective fed funds rate averaging 4.33% in recent months, the macro picture is neither stagflationary nor fully benign. UBS argues that proposed tariff hikes are an “escalate‑to‑de‑escalate” tactic likely to settle at an effective rate near 15%, nudging inflation only modestly higher and leaving risk assets supported. However, this raises questions about how trade policy noise and persistent deficits interact with the yield curve—and whether markets are underpricing the cost of rolling the nation’s debt at today’s coupon levels.

Treasury yieldsyield curveterm premium+7 more