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Showing posts from October, 2023

Possible Halloween Scares for Markets and the Economy

Here is the latest market commentary from our research department.  If you have any questions or if I can be a resource for you in any way please feel free to email me at or call (734) 272-4322! It’s a tradition here to write about what scares us around Halloween each year. The past few years have offered plenty of material to use in these annual commentaries, but with wars in Israel and Ukraine ongoing, Washington, D.C. dysfunction reaching new heights, the unrelenting rise in interest rates, still-high inflation, unaffordable housing, tight financial conditions, and a Federal Reserve (Fed) that has not yet signaled it’s done hiking rates, the list seems to be a bit longer and scarier than it usually is. But these are risk factors, not our base case. Keep in mind there are plenty of positives at the same time, including easing inflation, the resilient economy bolstered by a healthy job market, growing earnings, and the strong possibility that the Fed is d

Some Tips on TIPS (Treasury Inflation-Protected Securities)

  The move higher in Treasury yields (lower in price) has been unrelenting, with intermediate and longer term Treasury yields bearing the brunt of the move. Rates are moving higher alongside a U.S. economy that has continued to outperform expectations and not due to higher inflation fears. As such, the move higher has been largely driven by an increase in “real” yields, or inflation-adjusted yields or just TIPS (Treasury Inflation-Protected Securities). TIPS are Treasury securities whose principal and interest payments are adjusted for inflation. Unlike other Treasury securities, where the principal is fixed, the principal of a TIPS can go up or down over its term. So, when the TIPS matures, if the principal is higher than the original principal amount, you get the increased amount. If the principal is equal to or lower than the original principal amount, you get the original amount. So, since these securities are government guaranteed, TIPS investors who hold the individual bonds to m