The US presidential election and the ensuing shift in tone on the part of the Federal Reserve were certainly game-changers for financial markets in the short term. But now that the dust is settling from the initial reaction, markets are looking like they’re not entirely sure where they want to go from here. Are they confused, scared, or just waiting?
Source: Kevin Litwicki Universal Lending
Are Markets Confused, Scared, or Just Waiting?

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Although the first three weeks of the year weren’t inconsequential, investors were understandably eager to react to Trump’s first week in office. One of the most notable developments was a break higher for stock prices after weeks of stagnation. This had the unfortunate effect of pushing bond yields (aka “rates”) even higher.
Source: Kevin Litwicki Universal Lending
Rising Rates, Higher Prices, and Record Low Inventories

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Volatility is back with a vengeance since the election–especially for rates. Just when it looked like things might be calming down, this week’s Fed Announcement resulted in a spike to the highest levels in well over 2 years. As various media outlets rush to cover the drama, some stories have overplayed the drama while others fell short of relaying the true severity of the move.
Source: Kevin Litwicki Universal Lending
Rate Spike is Better and Worse Than You've Been Told

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While the Fed has managed to avoid embarking on a 4th round of quantitative easing (or “QE,” a term referring to large-scale asset purchases by central banks), European QE has been going full tilt since early 2015. Markets began to suspect the European Central Bank (ECB) might make its own tapering announcement in recent months and this week, it pulled the trigger. Will the fallout be the same for rates this time around?
Source: Kevin Litwicki Universal Lending
Europe Tapers, But Without The Tantrum

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