The Components of CAMEL Out of the 1,706 institutions with brokered deposits, IDC Financial Publishing (IDCFP) identified 69 ranked less than 125 in the first quarter of 2021, down from 79 the previous quarter. When we see the number of these poorly rated banks reach a low and begin to rise,…
Cycle low in U.S. T-Note yields due to several reasons. First, a massive short position, which anticipated significant yield increases, was covered to limit losses. The second reason remains foreign buying of U.S. Treasuries since dollar hedge U.S. yields continue to exceed foreign government yields hedged for currency risk. Third,…
The enclosed article from Financial Times supports IDC Financial Publishing’s forecast for the 10-year yield to rebound to 2% by year-end 2021 and how banks will be the major beneficiaries. Big Investors Stick with Bets Against Bonds After Painful Run1 Heavyweight bond investors are sticking with bets against US government debt, saying…
The Relationship Between Core and Trimmed PCE Inflation Rates and the 10-Year TIPS YieldWhen the 10-Year yield minus the core PCE inflation rate reaches its most negative point and reverses, this forecasts a low and recovery in the TIPS yield (see Chart I). Or, when the Federal Reserve changes policy…
The decline in the TIPS 10-year yield to -1.0% reduced the 10-year nominal yield to 1.35%. The delay in the expected increase in the TIPS to 0.4% and nominal to 2.0% reduces the 1-year forecast for appreciation potential for large banks to 57% from the initial estimate of 68%, based…
