
Bond Traders Go All-In on US Recession Bets That Defy Fed View
Bond investors are piling into wagers that a US recession is around the corner amid a growing dissonance between how markets and the Federal Reserve see the outlook for the economy.
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Bond investors are piling into wagers that a US recession is around the corner amid a growing dissonance between how markets and the Federal Reserve see the outlook for the economy.
Investors are quickly dividing corporate borrowers into the haves and the have-nots.
The Federal Reserve’s preferred measure of underlying price pressures probably remained elevated in February, keeping officials in a precarious spot as they seek to balance inflation-fighting resolve and stress on the banking system.
The shift to remote work is gaining momentum in some of America’s largest metro areas, despite increasing pressure from corporate chiefs for employees to return to the office, according to new data from an international team of economists.
Fears of tightening financial conditions leading to a recession are driving traders to rethink their risk exposure and seek out safety in the stock market.
Jun 29, 2020
Bloomberg News
,Contract signings to purchase previously owned U.S. homes surged in May by the most on record as mortgage rates fell and some states began to reopen from coronavirus lockdowns.
The National Association of Realtors’ index of pending home sales increased 44.3 per cent to a three-month high of 99.6, after falling in April to the lowest level in records back to 2001. The median projection in a Bloomberg survey of economists called for a 19.3 per cent gain in May.
Even with the outsize advance, the index is below the pre-pandemic high of 111.4, reached in February.
The advance adds to signs the residential real estate market is snapping back faster than most of the economy after the typically robust spring home-selling season was interrupted amid the shutdowns.
Mortgage rates have dropped to the lowest on record, helping to stabilize demand though the industry may be challenged by high unemployment and lingering health concerns.
“The outlook has significantly improved,” Lawrence Yun, NAR’s chief economist, said in a statement.
The Realtors project existing home sales to reach 4.93 million units this year, up from a previous forecast of 4.77 million. Last year, there were more than 5.3 million previously owned homes sold.
An S&P homebuilders index advanced 1 per cent in early trading on Monday after the Realtors data.
Some government officials began easing their restrictions on business in May. With coronavirus cases increasing in states including Texas, California and Florida, some locations are putting a pause on lockdowns. Still, home-purchase loan applications are close to an 11-year high.
Pending home sales rebounded sharply in all U.S. regions, including a 56.2 per cent monthly jump in the West and a 43.3 per cent gain in the South.