yield curve – Benefits Canada.com

What does Fitch’s downgrade of Canada mean for institutional investors?

mschmit — Mon, 29 Jun 2020 10:02:44 +0000

Since 2004, Canada has held a AAA rating from all major ratings agencies, but on June 24, it suffered a blow when Fitch Ratings Inc. downgraded the country to AA+. “The rating downgrade reflects the deterioration of Canada’s public finances in 2020 resulting from the coronavirus pandemic,” said the Fitch in a rating action commentary […]

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Are central banks running out of tools in their toolbox?

mschmit — Wed, 19 Feb 2020 04:53:56 +0000

Central banks’ actions have gone too far and they’re running out of tools in their toolbox, according to Erik Weisman, chief economist at MFS Investment Management. When interest rates are pushed to zero or into negative territory, people are deciding to save more instead of spending money on which they’re not earning interest, he says. […]

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What does the yield curve say?

mschmit — Wed, 25 Sep 2019 05:10:41 +0000

A lot of ink has poured into the discussion of an inverted yield curve, and what it means, yet I am still unsure if people understand whether an inverted yield curve is a precursor of a recession or not. The fear of an inverted yield curve relates to historical evidence, which shows that an inverted […]

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What’s behind negative bond yields?

mschmit — Fri, 16 Aug 2019 03:52:21 +0000

For the first time in its existence, the German 30-year government bond yield slipped into the negatives and it isn’t inconceivable that U.S. Treasuries could follow suit, said Joachim Fels, global economic advisor at PIMCO Corp., in a recent blog post. While negative yields have lately been cropping up in developed markets outside the U.S., […]

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Fed lowers interest rate for first time since 2008

mschmit — Thu, 01 Aug 2019 06:15:56 +0000

While many indicators point to the relative health of the U.S. economy, the Federal Reserve is lowering the target range for the federal funds rate by 25 basis points to a range of two to 2.25 per cent. This marks the first rate cut since 2008. “Markets weren’t surprised,” says Dec Mullarkey, managing director at […]

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Long-duration fixed income still in demand as U.S. yield curve inverts

mschmit — Wed, 27 Mar 2019 08:52:26 +0000

With turbulent equity markets, fixed income has a major role to play as defined benefit pensions look to more closely match their liabilities and investments, says Steve Peacher, president of Sun Life Investment Management. “The big mismatch over time has been a duration and curve mismatch,” he says. “People have had long liabilities. They haven’t focused […]

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