James K. Ho

The Federal Reserve’s fight against inflation appears to be finally paying dividends. From a high of over 9% in early 2022 the consumer price index (CPI) has come down into the low 3% range; in November core inflation (which excludes the volatile components of food and energy) was reported a 3.1%. While still above the […]

Interest rates continued to march higher in the third quarter. In July the Federal Reserve raised the Fed Funds rate for the tenth time to a range of 5.25%-5.5%. The labor market remains firm with the unemployment rate to 3.8%. Although inflation has declined, it is still not near the Fed’s target of 2%. The

Interest rates resumed their uptrend in the second quarter after having declined earlier this year. The collapse of two large banks had given hope to investors that the Federal Reserve would refrain from further rate increases and even potentially lower rates. Fed officials feared their past rate increases, together with recent banking industry stresses, would

Early in the year bond yields declined along with an improved stock market on hopes the Federal Reserve would slow its pace of rate increases. After raising rates at the fastest pace since the 1980s, inflation and economic growth appeared to have slowed. Investors interpreted the Fed’s .25% rate increase in February, down from as

The year 2022 saw interest rates increase across all maturities as inflation soared to levels not seen in several decades. What had been considered transient inflation due to supply chain constraints/bottlenecks turned out to be intransient. To rein in inflation, the Federal Reserve embarked on a series of interest rate increases beginning early in the

The bond market continued to surprise investors during the fourth quarter. Despite investors’ fears of higher interest-rates, longer term bond yields have maintained their low levels. The 10-year US treasury reached a high of 1.66% during the quarter before declining to 1.52% as fears over the Omnicom variant stoked fears of slower growth. Although this

In the third quarter, other than a modest steepening in the yield curve, the bond market essentially marked time. The 10-year US treasury note ended the third quarter at .69% versus .65% at the end of June. The two-year treasury declined from .15% at the end of June to .13% at the end of the

The year 2020 started off with continued strong economic growth fueling the equity market to new highs. Bond yields remained low as inflation continued to be muted. Then the Coronavirus Pandemic hit and threw everything out of kilter. Beginning in early March the economy shut down across the US and growth fell off a cliff

An uptick in economic activity caused bond yields to tick up modestly during the fourth quarter. In contrast to some foreign economies, US consumer and business spending rebounded. The Federal Reserve lowered interest rates for the third time; the Fed Funds rate is now at 1.5-1.75%. Despite strong labor markets, inflation remains under control and

In the fourth quarter of 2018, equity and bond markets reversed direction from trends established through most of the previous nine months.  Tough talk on tariffs and more signs of a slowing economy both in the US and globally weighed on equities, while at the same time helping treasury bond prices advance (leading to lower