Bond yields, and specifically yields on U.S. treasuries, are a great barometer for the overall U.S. economy and to a lesser extent, the global economy. Chief among all the debt issued by the U.S. government is the 10-year Treasury, whose yield is one of the most closely followed indicators in global financial markets.
Red, White and Blue Labor Market? Hardly.
Summer is in full swing, and many will observe the 4th of July this weekend with family, friends and traditions. For those planning to celebrate, I hope the holiday weekend is filled with pleasant weather and unforgettable memories with the people who matter most. However, for many, the week isn’t over yet.
Unpacking America's Debt: Who Really Holds the Bag?
There’s a common belief that most of the U.S. national debt is owned by foreign countries—especially China. But the reality is far more nuanced, with most of the debt being held domestically. As of December 2024, the total U.S. national debt stood at $36.1 trillion. That number includes two main parts: debt held by the public and intragovernmental holdings. The public portion—about $28.8 trillion—is what really matters when we talk about who owns U.S. debt. The rest, around $7.3 trillion, is money the government owes itself, such as social security and Medicare trust funds.
Retail Therapy
The mood among American consumers, by many accounts, is grim. This sense of uncertainty and anxiety has intensified throughout 2025. Both military and trade wars continue to simmer as political divisions widen. The cumulative weight of inflation, coupled with concerns about the U.S. fiscal situation and interest rates that remain higher than their pre-COVID levels, all contribute to a collective unease. The alarmist tone of much of the media only serves to amplify these anxieties, creating a climate where apprehension seems to be the default setting.
All Eyes on Employment
Last weekend, I caught up with a childhood friend working as a graphic designer. While discussing our respective careers and industries, he mentioned the difficulty his colleagues were having in finding jobs in their field, an experience that seemed to contradict the positive U.S. employment statistics reported earlier in the year. This week, both he and investors anxiously awaited the release of several related reports, hoping to gain a better understanding of the current state of the labor market and its recent shifts.
May Flowers
As the final days of May unfold, American consumers are feeling notably more optimistic. After several months of declining sentiment, the latest consumer confidence data showed a strong rebound from an almost five-year low, with the increase largely attributed to easing trade tensions.
Big, Beautiful Bond Yields
Over the last few weeks investors have put upward pressure on bond yields for a variety of reasons. First, the U.S. treasury lost its last AAA rating when Moody’s downgraded United States debt to AA.
Data vs. Drama: The Real Economic Story
After a 20% rebound from its April 7 lows, the S&P 500 is positive for the year, marking one of the most significant short-term comebacks in market history. The market rallied on Monday following weekend news about tariff negotiations with China. In a complete reversal from the earlier “Liberation Day” tariff announcement, the punitive 145% tariff rate on Chinese goods was reduced to 30%, with a 90-day pause implemented. In response, China lowered its retaliatory tariff rate on U.S. goods from 125% to 10%.
Muni Moment: Why Yields Are Attractive Now
For investors seeking income and a source of portfolio stability, municipal bonds present a compelling option. These debt instruments are issued by cities, states and local governments across the United States to finance public projects such as schools, roads and utilities.
A Break From Tariff Talk
This week, for the first time in months, tariff news was overshadowed by economic and earnings headlines. Those of us in the business of analyzing the market and economy can agree that this was a refreshing shift.
Independence Day
Independence Day may evoke visions of fireworks and parades or perhaps memories of the 1996 summer blockbuster movie where aliens hovered over The White House. While no actual fireworks or aliens were involved, this past Tuesday was probably the most pressing “Independence Day” for our country’s central bank as Federal Reserve Chair Jerome Powell’s political independence was put to the test.
Short Week, Big Moves
As February draws to a close, so does our first quarter outlook season. We enjoy hitting the road and sharing our 2025 Investment Outlook with clients and colleagues, and are grateful for the chance to come together and look forward to what's ahead.
Return of the Vigilantes
This week, equity market volatility continued due to last week’s announcement of global tariffs. Investors, attempting to handicap the potential impacts on the U.S. economy and corporate profits, caused a bond market rally by selling risky assets (stocks) and buying safe assets (government bonds). However, something changed over the weekend. The 10-year U.S. Treasury yield started the week at 3.9% and, by Tuesday evening, had reached 4.5%.
Shock and Awe
This week, the presidential inauguration and subsequent flurry of executive orders left investors deciphering what is ‘signal’ versus ‘noise’. Fortunately, in the background, public companies have started reporting fourth quarter earnings and reveal expectations for the year ahead.
Pick Your Poison
Equity markets surged on Monday only to come under pressure to close the week at a 1.5% loss. Absent a rally greater than 4% on Monday, this will be the first quarter since the summer of 2023 when investors have lost money in domestic stocks.
Global Gains, U.S. Pains
Something is happening that hasn’t occurred in a very long time – international stocks are outperforming the U.S. markets. This shift marks a significant departure from the long-standing dominance of U.S. equities, which have historically been driven by robust earnings growth and technological innovation.
Tariffs and Volatility: Turn Down the Volume
This week, we sent this communication to all Ferguson Wellman and West Bearing clients in response to heightened market volatility. We felt that this message was also appropriate to reiterate for our weekly blog.
The Tariff Tantrum
After last November's presidential election, it was widely understood that tariffs would be on the agenda for 2025. Early this year, however, markets largely shrugged off these concerns, viewing tariff threats primarily as a negotiating tactic rather than a serious economic risk.
Déjà Vu and the Debt Ceiling
Yogi Berra might have been one of the most accomplished baseball players in history, but his greatest legacy may have been his contribution to classic sayings, otherwise known as “Yogi-isms.” His famous quote about déjà vu was supposedly uttered after watching Mickey Mantle and Roger Maris hit back-to-back home runs in 1961. However, one could easily hear it being uttered today when observing the politicians in Washington D.C. grapple with the federal debt ceiling that is due to be lifted or suspended again this year.
Wrapping Up
As February draws to a close, so does our first quarter outlook season. We enjoy hitting the road and sharing our 2025 Investment Outlook with clients and colleagues, and are grateful for the chance to come together and look forward to what's ahead.