The Federal Reserve Bank of Boston has released a Public Policy Brief by Jeffrey C. Fuhrer and Giovanni P. Olivei titled The Role of Expectations and Output in the Inflation Process: An Empirical Assessment:
This brief examines two issues of current interest concerning inflation: (1) whether “well-anchored” expectations will help to restrain inflation’s decline and whether an “un-anchoring” of expectations could lead to undesirably high inflation and (2) to what extent output (or utilization) gaps are useful components of empirical models of inflation and, if they are useful, to what extent current gaps might counterbalance the effect of expectations on inflation. The goals of conducting this examination are to articulate a reasonably coherent framework for the discussion, highlight the key areas of uncertainty, and provide new empirical evidence that sheds some light on these areas.
Nothing much happened in the credit markets, so I’ll discuss Toronto politics. Why not?
I am pleased to see that Queers Against Israeli Apartheid is being readmitted to the Pride Parade:
Pride Toronto has announced that its recent resolution to restrict the use of certain language during the 2010 Parade has been replaced by the requirement that each participating group read, sign and agree to abide by the City of Toronto’s Declaration of a Non-Discrimination Policy, and that all groups that uphold this policy are welcome to participate in the 2010 Pride Parade.
The requirement to “read, sign and agree to abide by the City of Toronto’s Declaration of a Non-Discrimination Policy” is more than just a little bit precious, but if Pride wants to jump through those hoops, that’s their business. To me, it just shows there’s not much point in getting involved with any sponsored civic activity.
Two mayoral hopefuls seem to think this is an issue in which the city should be involved:
“I want to express my disappointment and disgust with Pride Toronto’s decision to allow this hateful group to march,” said mayoral hopeful Rob Ford.
Giorgio Mammoliti, who is also running for mayor, will introduce a motion at council demanding that Pride return all city funding, about $250,000.
Pride’s done a lot more to bring money into the city than either of those two clowns ever have! I think they should concentrate a little more on how to get a souvlaki cart licensed in less than three years.
PerpetualDiscounts gained 14bp today to keep the streak alive – two more days and they will have gone the entire month of June without a loss. FixedResets were flat; volume was moderate; volatility was almost non-existent.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 2.80 % | 2.91 % | 30,248 | 20.37 | 1 | -2.3621 % | 2,048.0 |
| FixedFloater | 5.08 % | 3.25 % | 21,722 | 19.87 | 1 | 0.5164 % | 3,151.1 |
| Floater | 2.40 % | 2.80 % | 77,029 | 20.22 | 3 | -0.0914 % | 2,258.4 |
| OpRet | 4.87 % | 3.49 % | 86,042 | 0.42 | 11 | -0.2502 % | 2,334.2 |
| SplitShare | 6.33 % | 6.22 % | 88,425 | 3.47 | 2 | -0.2829 % | 2,191.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2502 % | 2,134.4 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1369 % | 1,916.3 |
| Perpetual-Discount | 5.93 % | 6.01 % | 194,811 | 13.93 | 77 | 0.1369 % | 1,813.9 |
| FixedReset | 5.42 % | 3.97 % | 318,296 | 3.46 | 45 | -0.0050 % | 2,185.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.E | Ratchet | -2.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-28 Maturity Price : 21.67 Evaluated at bid price : 20.75 Bid-YTW : 2.91 % |
| BAM.PR.O | OpRet | -2.30 % | YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : 4.30 % |
| GWO.PR.J | FixedReset | -1.22 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 26.62 Bid-YTW : 4.06 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PR.O | Perpetual-Discount | 44,405 | Nesbitt crossed blocks of 10,500 and 16,500, both at 21.30. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-28 Maturity Price : 21.24 Evaluated at bid price : 21.24 Bid-YTW : 5.82 % |
| TD.PR.K | FixedReset | 31,754 | RBC crossed 24,800 at 27.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 27.45 Bid-YTW : 3.98 % |
| RY.PR.A | Perpetual-Discount | 29,747 | RBC crossed 15,000 at 19.68. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-28 Maturity Price : 19.68 Evaluated at bid price : 19.68 Bid-YTW : 5.73 % |
| POW.PR.A | Perpetual-Discount | 28,800 | RBC crossed 28,800 (yes, every share that traded) at 23.15. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-28 Maturity Price : 22.69 Evaluated at bid price : 22.93 Bid-YTW : 6.12 % |
| TD.PR.M | OpRet | 26,336 | RBC crossed 20,000 at 26.31. YTW SCENARIO Maturity Type : Call Maturity Date : 2010-07-28 Maturity Price : 25.75 Evaluated at bid price : 25.99 Bid-YTW : 2.18 % |
| RY.PR.X | FixedReset | 21,760 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-23 Maturity Price : 25.00 Evaluated at bid price : 27.35 Bid-YTW : 4.03 % |
| There were 25 other index-included issues trading in excess of 10,000 shares. | |||