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The Fear There is growing concern that the trillions of dollars of stimulus created by governments and central banks to fight the economic fallout of the coronavirus will explode through the economy and cause a surge in inflation in the second half of 2021. Sustained upward price pressures would cause
Interest rates go up, prices go down. Ask any fixed income portfolio manager in the world what the first rule of investing in bonds is and you’ll hear the phrase above or something similar. And while the notion that bond prices decline as interest rates increase is not a matter
Before the COVID-19 pandemic took hold on the world and the United States, many community bankers watched the slow fall of their on-balance sheet liquidity. Throughout the last decade of economic expansion, many community banks’ loan demand consistently outpaced deposit growth. At the beginning of 2020, bankers’ expectations for the
A wave of forbearance expirations expected this spring has investors anxiously awaiting clarity on what it will mean for the mortgage market. COVID-19 forbearance plans introduced by the CARES Act last year make it possible for any borrower with a mortgage backed by Fannie/Freddie/Ginnie to stop paying their loan for
“The potential impact of the COVID-19 pandemic on the City cannot be quantified at this time, but the continued outbreak of COVID-19 could have an adverse effect on the City’s operations and financial condition.” This disclosure, or something like it, is now regularly included in documentation by municipal issuers. While
How We Got Here In 2009, some said interest rates had nowhere to go but up. Well, Treasury yields found a way to continue to go down and stay down. The Fed took seven years to increase the funds rate by a quarter point at the end of 2015, then
Over the past few years, the municipal securities market has experienced a growing number of municipal issuers that have met their borrowing needs by going directly to investors to access capital. This practice is commonly referred to as a “private placement.” There are many reasons why an issuer may elect
Over the past few years, the municipal securities market has experienced a growing number of municipal issuers that have met their borrowing needs by going directly to investors to access capital. This practice is commonly referred to as a “private placement.” There are many reasons why an issuer may elect
By Dale Sheller and Matt Harris As summer winds down, the same goes for the Payroll Protection Program (PPP) as August 8 was the final day for application. This critical but controversial component of the $2 trillion CARES ACT passed in March this year created over $525 billion in loans
With all the distractions and distracting challenges faced this year by the nation’s community bankers, it’s easy to understand how some may have lost track of an approaching deadline that could have significant consequences for their institutions and their customers. Unless something changes, and the authorities have been pretty clear
Where We Are Today In an emergency Sunday meeting on March 15, 2020, the Federal Reserve announced it was dropping its benchmark interest rate to zero and launched a new round of open-ended quantitative easing. The move was a direct response to the coronavirus outbreak, which had disrupted economic activity
2020 will certainly be remembered as the year Covid-19 changed the world as we know it. Likewise, the associated “Lockdown Recession” is already changing the way many banks manage their balance sheets. With loan demand dropping in most parts of the country and stimulus deposits adding to already bloated cash
The world has changed. The nation’s economic lockdown has given previously confident consumers a new and cautious attitude of frugality. The propensity to borrow and spend has turned into an inclination to deleverage and save. Once prosperous businesses struggle to stay afloat as society and culture adjust to a new,
2020 will certainly be remembered as the year Covid-19 changed the world as we know it. Likewise, the associated “Lockdown Recession” is already changing the way many credit union leaders manage their balance sheets. With loan demand dropping in most parts of the country and stimulus deposits adding to already
The Federal Reserve just announced a new Municipal Lending Facility targeted to specific state and local governments. The facility will buy up to $500 billion of short-term notes directly from states and local governments. Only cities with a population of at least one million residents and counties with a population
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