10-8-26 Is the Term Premium Misleading the Fed?

Is the Federal Reserve relying on a metric that cannot be reliably measured?

Dallas Fed President Lorie Logan recently discussed the role of the Treasury term premium in determining whether rising long-term interest rates are doing some of the Fed’s work for it.

Lance Roberts & Michael Lebowitz examine what the term premium actually represents, why different models disagree, and whether policymakers risk putting too much emphasis on an uncertain estimate when setting interest rates.

0:00 - INTRO

0:50 - Earnings Season & Optimistic Guidance

2:10 - Bond Auctions & Interest Rate Dynamics

3:42 - Markets Sitting at all-time highs...

4:38 - Earnings Announcements Should Help Support Markets

5:31 - Election Year Market Performance

8:55 - Commentary on Laurie Logan Commentary

12:33 - What is the Term Premium - Decomposes the Yield

13:49 - Constraints to Yields - What Goes Into a 10-Year Yield (chart)