From Maple Capital Management
“Lift-off of Blue Origin’s rocket on July 20th was another exciting accomplishment for private sector space exploration. The entire expedition, coming on the 52nd anniversary of the Apollo 11 moon landing, was executed with perfection and all four passengers returned safely to Earth after experiencing a brief few minutes of space travel.
Lift-off of another kind, that of the Federal Reserve in raising rates from the zero bound, is being vigorously debated in the bond market in terms of the timing as well as the conditions that may lead to an eventual rate increase. Information on the pace of the economic recovery (i.e. some slowing in recent economic data) in the context of rising COVID-19 cases has altered investors’ assumptions about when the Fed may be able to finally lift short-term interest rates. As a result, bond yields fell in July which led to a very respectable total return on the Bloomberg Barclays Intermediate Aggregate Bond Index of 0.72%.”
TC122494(0821)1