Articles Tagged: tips

3 articles found

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).

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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).

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Tariffs, TIPS and a Tale of Two Highs: Rebuilding a Gold-versus-Stocks Playbook for a Late-Cycle Market

A surprise U.S. tariff on standard bullion bar sizes has jolted the plumbing of the global gold market, pushing New York futures above London prices and confusing traditional hedging flows, according to a Yahoo Finance live blog that cited U.S. Customs and Border Protection and earlier reporting by the Financial Times. At the same time, both SPDR S&P 500 ETF (SPY) and SPDR Gold Shares (GLD) sit within a whisker of their 52-week highs as of Friday, August 8, 2025, underscoring how risk assets and hedges are rallying in tandem. The macro backdrop is equally paradoxical: the 10-year minus 2-year Treasury spread has re-steepened to roughly +51 basis points, while 10-year TIPS yields—a proxy for real rates—remain near a restrictive ~1.9%, and corporate spreads are benign. For allocators calibrating equity beta and gold hedges, the signals don’t line up neatly. However, this raises questions about where we are in the cycle, what the tariff shock means for gold’s microstructure, and how to structure a robust, forward-looking allocation. This investigation synthesizes market data with policy developments to offer a framework that tilts but does not lurch, keeping room for multiple outcomes.

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