Chasing Yields

The bond market sold off today, with fresh concerns about the outlook for inflation after the June CPI showed prices rose the most since the beginning of the year, and continued threats from President Trump to fire Federal Reserve Chairman Jerome Powell.

As Wall Street resumes operations post the July 4th holiday, the market is grappling with the implications of the President’s tariff commentary. The 30-year Treasury is edging towards 5% today, with the 10-year just below 4.5% as I write.

Since the start of the year, both large U.S. corporations and small businesses have faced a highly uncertain financial landscape. With rising interest rates, imposing tariffs, and a volatile political environment, the level of uncertainty is unprecedented.

The likelihood of a 5%-5.25% bond being called in the current and future rate environment largely depends on several factors, including interest rate trends and the issuer’s financial strategy.

A 5% yield on a 30-year municipal bond is an attractive buying-point for high-quality, tax-free investors.

According to Bloomberg, J.P. Morgan Chase raised its forecast for 2025 municipal bond issuance from $490 billion to $560 billion.

The May ADP Employment Report, released today, brought unexpected news-the private sector added only 37,000 jobs, a stark contrast to the anticipated 110,000. These ADP numbers, which reflect the monthly changes in private business hiring, mark the lowest point since...

The US Dollar, a symbol of strength and security, is not just a currency but a global’ shelter in the storm.’

As a bond trader for over 40 years, I’ve seen many brokerages and banks consolidate. One of the well-known stock brokerage houses in the 70’s and 80’s was E.F. Hutton, who later became part of a Citigroup/Morgan Stanley joint venture.

The national public debt is essentially a collective responsibility that falls on all tax-paying individuals in our country. This debt represents the fees the government pays to fund its operations, including borrowing costs and interest on loans.

This week, the Federal Reserve Open Market Committee Meeting kicks off its May policy meeting. Expectations are that the Fed will maintain its position and wait for more hard facts to support the decision to lower interest rates, possibly making its first move to reducing rates in June or July.

This week, about 30% of companies that make up the S&P are reporting first-quarter earnings. While many of these companies announced better-than-expected numbers, the big question lurking over the markets is, "Can we trust 1st quarter earnings considering the...