Tag: bonds

Bill to Cut Nashville City Center Funding Calls into Question Tax Plan for New $2.2B Titans Stadium

The Center Square

A new proposed bill in the Tennessee not only proposes cutting some of the state tax funding to pay debt on the Music City Center, but it also calls into question plans to build a new $2.2 billion Tennessee Titans stadium.

Senate Bill 648, filed Thursday by Sen. Jack Johnson, R-Franklin, on behalf of Lt. Gov. Randy McNally, R-Oak Ridge, would change the way taxes flow to Metro Nashville to pay debt from the Music City Center, which opened in 2013. The bill does not yet have a House sponsor.

Read the full story

Federal Reserve Scales Back Bond Purchases as Inflation Rises

Admin

The Federal Reserve announced Wednesday that it would begin scaling back its monthly bond purchases in November, marking the first step towards ending its pandemic stimulus as inflation surges.

The scaling of bond purchases, more commonly known as tapering, will start “later this month,” the Federal Open Market Committee (FOMC) said in a statement. The Federal Reserve will reduce its purchases by $15 billion each month — $10 billion less in Treasury bonds and $5 billion less in mortgage-backed securities — from the current $120 billion figure.

Read the full story

Tech Leads the Way as US Stocks Head for a Third Month of Gains

The Associated Press

Stocks closed higher on Wall Street Tuesday, extending the market’s recent winning streak after another strong showing by technology companies.

The S&P 500 rose 0.4% and is on pace for its third straight monthly gain. The Nasdaq composite, which is heavily weighted with technology stocks, climbed to an all-time high for the second day in a row. Bond yields rose, another sign of increasing confidence in the economy.

Read the full story

Commentary: A Case for Continued American Economic Growth

Admin

by Rick Manning   The office discussions at Americans for Limited Government are lively with voices often raised over various interpretations of what the news of the day means. While none of us are economists and we don’t even belong to the Holiday Inn Rewards Program, we still have extended and sometimes loud discussions on the meaning of different economic events. Last week, a future recession signal was hit when the interest rate paid by a three-month Treasury bond went higher than the interest rate paid for a 10-year Treasury bond. Wait, don’t go away, this is really easy. It is logical that the interest rate investors would seek for a short term debt would be low, while investors would seek a higher return for parking their money in a ten-year investment. After all, the three-month bond goes away rapidly so if interest rates rise higher than what you are earning on your investment, you are not stuck with a loser for long (in this case a maximum of 3 months.) But if you buy a 10-year bond which only pays 2.4 percent interest as was the case on March 29, when the three-month bond is paying 2.4 percent, it…

Read the full story

As The Fed Dumps Billions in Government and Mortgage Bonds, Questions of ‘Engineering’ a Recession Swirl as 2020 Nears

Admin

by Robert Romano   Recession warning lights are flashing predictably after the Federal Reserve has finally ended quantitative easing – it’s now dumping $50 billion of government and mortgage bonds a month – and short-term interest rates have risen. The 10-year-3-month treasuries spread inverted on March 22, and the 10-year-2-year and the 10-year-federal-funds-rate do not appear to be far behind from inverting. When interest rates invert, it means the interest rate on short-term bonds is higher than the rate of return for long-term bonds, meaning there is slightly more demand for the long-term bonds, which are viewed as a relatively safer investment. So, how did we get here? The short answer is that since the Fed began dumping bonds back on the market – it has shed $458 billion since Sept. 2017 – short-term interest rates have been steadily rising. This usually happens anyway as the business cycle comes to a close. But what it tells you is that this particular business cycle was prolonged – by a lot – with the Fed artificially keeping short-term interest rates low, not by manipulating the benchmark federal funds rate, but through quantitative easing and then refinancing a vast horde of U.S. treasuries. The U.S. is long overdue for a recession – it…

Read the full story