Go Time. “The environment for fixed income investors remains complicated, with uncertainty around interest rates and geopolitical risks continuing to affect credit markets in real time. RCIRX is designed specifically for that backdrop: a disciplined, income-focused strategy

*POWELL: POSSIBILITY THAT NEXT MOVE MIGHT BE HIKE DID COME UP

Curve Steepener Widow Maker 1/2/3-yr bonds up 26/38/31bps YTD 10s up 11bps 30s up 3bps This is where floaters shine. Stay short my friends.

TIPS Buckets We wanted to see if any of these 1-year TIPS buckets was special? i.e. 0-1yr funds need to wait for the longer maturities to get into the 366-day window, where there are only five outstanding bonds. As we can see, there is no supply mismatch between each 1-year

Stay Short My Friends YTD outperformance of floaters vs bills: 9bps Think you're safe in 1-3mo Treasury Bills? The index has a duration of .19 years. Duration on Treasury Floating Rate Notes (FRNs)? .01 years. These reset weekly at a spread off 13-week bills. The Treasury

Curve Steepness and Banks This move is bullish for banks. Folks have been pointing to the 2-10yr curve flattening (blue) as an indicator of banks selling off. What's more important to banks is the 3mo-7yr curve (white), which has been steepening. Banks fund via short-term

1970s Inflation Reprise? There was a missing piece to this corollary, which was that the 1970s saw an oil embargo and supply induced inflation shock. Well what do we have now? 20% of the world’s natural gas supplies have just been knocked off line for the next 3-5 years.

Rated Feeders: No Assets, No Problem “It’s not individual assets that I can diligence. It’s not even individual funds that I can diligence, because it’s future, hypothetical funds,” the executive added. ft.com/content/908273… The black-box funds fuelling insurers’ private

AI Use is Going Parabolic “Traffic has increased eightfold over roughly the last two months” “Over the last 30 days, OpenAI has witnessed a ‘fundamental switch’ in how businesses are using AI” wsj.com/tech/ai/claude…

Mortgage Bond Buying The cure for wide mortgage spreads is wider mortgage spreads! bloomberg.com/news/articles/…

Fertilizer Prices Urea spot prices are up over 50% since the start of the year. Add this and helium, which is a primary input to chip production to oil and natural gas prices. Every day this conflict goes on adds weeks if not months of price pain in the future.

2.5 Rate Hikes Priced In By the ECB And the BOE 1.5 priced in by the BOJ The US is next!

5.25% yield for 20 years If you think yields are high and want to lock them in, without reinvestment risk, the best option are zero-coupon bonds. Here you'll find a 19-year Treasury STRIP, yielding 5.251%, which costs ~$371k to get $1mm at maturity. 2.69x ROI

5.23% Yield on Govt Guaranteed Federal Farm Credit Bureau 2039 maturity Callable in March 2027 5.23% yield to maturity (+83bps / 10yr) 7+% yield to call

⭐️ ⭐️ ⭐️ ⭐️ / 5 Sidney Homer is the Godfather of fixed income research. After tackling all his other works, this was a good reprise to “hear” him talk about bonds, inflation and the market from 1962 - 1974. Reading primary sources is a superpower.

This Time is Different ...and it could wreak a LOT more havoc. "This is the first time the Strait has been closed...in 1973 and 1990 only a little more than 6 percent of global oil supplies was removed from the market and in 1979 and 1980 only about 4 percent. Today, we are

Century Bonds 21x ROI on this Austria 0% coupon century bond 91-year duration! $4.75 price (up 100% over the last three months!) Nice, cheap, convexity play This was a 100mm private placement, the Government of Austria did in 2020. Today, the entire 100mm can be had for

The Other 100-year Austria Bond 5.95bb issue 0.85% coupon Issued on 06/30/2020, 100-year maturity! Issued at $98.01, currently trading at ~$31

Are Stocks an Inflation Hedge? As the market has done well over the last 3-4 years, folks are thinking that stocks do well when inflation roils. Prices up = stocks up, right?!? Take a look a real (inflation adjusted) returns of the S&P, when inflation is > 4%. Only 2.5%

Housing Upside Deep discount, 1% coupon off 3.84% coupon mortgages At 6% prepayment for life, 5.24% yield At 9% prepayment, 6.22% yield At 12% prepayment, 7.29% yield Nice base case, nice upside (convexity they call it)