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Financial analysts have spent a lot of time this year discussing the yield curve. Specifically, they’ve pointed out that the yield curve is almost flat, and that an inverted yield curve almost always leads to a recession. They’re worried that the yield curve says a recession isn’t too far away. In this article, a Federal […]
Since the Federal Reserve began tightening monetary policy, many economists expected yields on treasury bonds to exceed 3%. Investors were burned for several years by betting on higher rates as rates stayed stubbornly low. Even now after rates finally are well above their lows, treasury yields won’t stay above 3% for long. This article gives […]
Many economists say they’re worried about the economy, because the yield curve is flattening. The yield curve does have a good record of forecasting recessions ahead of time, but the details are important. In these times of unusual monetary policy, it’s important to take a close look at the details and the history. This blog […]
When interest rates rise, government bonds are the first investments to suffer. Since they’re considered to have little or no credit risk, their prices adjust quickly to changes in rates. Corporate bonds, both investment-grade and high-yield, make small adjustments to interest rates. But investors in them are more focused on credit quality and liquidity. That’s […]
There is a lot of misunderstanding about a key indicator of the economy and markets. The yield curve is attracting more and more attention. Most of the analysts drawing attention to the yield curve say it is giving or about to give a big warning to investors. I think they’re misreading the yield curve and […]
This paper argues that the low global inflation since the early 1980s is partly due to demographic changes. In particular, a growing global labor market kept a ceiling on wages, which kept a ceiling on prices. It also increased productivity. Those trend of a growing global labor market is reversing. Therefore, over the next few […]
Many people benefit from delaying their Social Security retirement benefits until at least full retirement age. Delaying until age 70 can be an even better deal. For years I’ve shown people how to calculate the difference using what I call the quick-and-dirty method. The method involves calculating how many years you need to live after […]
Jeffrey Gundlach of DoubleLine Funds has been an advocate of the idea that interest rates aren’t going to rise any time soon. He’s been saying that for several years, even after the consensus in the investment community seemed to agree that interest rates had to start rising. Proof of the consensus is in the futures […]