All things fixed income. Opinions mine. @BloombergRadio @Business former @gadfly https://t.co/YExR5brzUE https://t.co/oEDubcRN0q
It's fair to question how much of this credit improvement is fundamental versus simply a byproduct of a Fed hell-bent on preventing mass defaults.
The Fed's balance sheet rose to a new high of $8.2 trillion in the past week. Not a huge surprise, given the Fed's $120 billion in monthly debt purchases. But it's an important backdrop for central bankers' increasingly heated debate over when to taper their bond-buying program:
The measure of inflation most watched by the Fed surges to the highest since 1992. U.S. personal consumption expenditure core price index:
Disney stops paying 100,000 workers, roughly half its workforce, even as it protects executive bonus schemes and a $1.5 billion dividend payment due in July.
Wuhan, where the global pandemic began, reported its first cluster of new infections since a strict quarantine was relaxed in early April. This highlights once again the likelihood of rolling outbreaks around the world until there's a vaccine.
The US federal minimum wage is worth 70% of what it was in 1968 and about a third of what it would be had it kept pace with productivity. This is especially relevant because in recent years, job growth has been concentrated in the lowest-paying industries.
This is what happens when central banks squash the risk of corporate defaults by suppressing borrowing costs: the difference between junk and high-quality credit rates shrinks dramatically. The yield gap between the two is now near the smallest on record.