The decline in the yield on Treasury Inflation Protected Securities (TIPS) best explains how the Federal Reserve stimulates the economy following a recession. During the 2009 to 2012 period of recovery following the financial crisis of 2008/09, the TIPS yield peaked at 2.0% in 2008 and subsequently declined to -1.5%…
Covid-19 and a second quarter 2020 short-term recession have created potential risk in the banking system. Reports on bank financial conditions to be released in February (2020Q4) will further detail this risk. Subscribe to IDC Financial Publishing’s online portal to receive updates. Out of the 1,814 institutions with brokered deposits, we…
The Number of Financial Institutions Issuing Brokered CDs Temporarily Declines The number of institutions issuing brokered CDs grew significantly in 2018 and 2019. Banks, savings institutions, and credit unions rose from a plateau of 961 in 2017 and increased to a peak of 1,356 in the 2nd quarter of 2019. The…
In the post-COVID-19 period, import prices provide the best forecast of inflation. As seen in Chart I, the percent growth in U.S. non-fuel import prices forecast U.S. core CPI. Since U.S. inflation is measured by year over year growth, the low registered in the 2nd quarter of 2020 provides a…
The copper to gold ratio has historically been the best forecast for the U.S. 10-year yield. The positive correlation between the two is extremely high, but discrepancies have occurred. As seen in Chart I, from early 2018 to August 2019, during the “tariff wars” and falling German yields, the U.S.…
