In anticipation of a large tax reform deal that has powered equity markets higher, the Treasury market has been oddly quiet. Tax cuts for both corporations and individuals have many investors anticipating a pickup in economic growth and inflation. Yet longer-term Treasury yields, largely reflective of growth and inflation expectations, have barely budged in over a month and a half. Most of the action in interest rates has been concentrated in short-term yields, which have steadily marched higher since early September.

Trading Range

The complacency in longer-term yields has been historic. Over the 37 trading days from October 2

The bull market continues to march higher. The S&P 500 Index is near one of the most overbought levels in history and this has many wondering how much longer the rally can continue. The longer-term technical indicators continue to look strong, but sentiment is flashing some warning signs suggesting market volatility could finally be heating up.

Most Overbought in 22 Years

How can we sum up the events of 2017? Although our favorite story might be that the world’s largest snowball fight was canceled because of too much snow, this year will be remembered for being one of the least volatile years in history. In other wor

With the end of the year fast approaching, ‘tis the season for reflection on forecasts past and the sharing of forecasts future. We do not have an award for “Forecast of the Year,” but if we did, in 2017 it would go to the Federal Reserve (Fed). While the Fed’s “dot plots” are not a forecast strictly speaking, it’s fair to take the median dot as a rough consensus view. With its rate hike last week, the Fed hit its mark of three hikes in 2017, matching the view set out in its final set of dot plots in 2016. With the economy surprising to the upside, the Fed was able to follow through on its expected ra

The coming week will be a busy one for central banks, with the Federal Reserve (Fed), European Central Bank (ECB), and Bank of England (BOE) all scheduled to hold policy meetings. The Bank of Japan will also meet the following week, with its statement coming on December 21. Outside of a potential Fed hike, we don’t expect much in the way of policy updates from any of these central banks. However, the general theme of central banks moving in the direction of moderating accommodation, or in the case of the United States normalizing policy, is likely to remain intact.

Federal Reserve: Rate Hike on Deck

We don’t expect