Another new 52-week high for the TXPR price index, as today’s high of 673.58 (the close was 673.35) eclipsed Friday’s mark of 673.26.
Mohamed El-Erian, the former CEO of bond giant PIMCO, thinks Powell should surrender:
“The attacks on Chair Powell are now extending to the whole institution. The longer Powell stays in power, the more that process will continue, fundamentally threatening the independence of the Fed,” Mohamed El-Erian, the former CEO of bond giant PIMCO, told CNN in a phone interview on Tuesday.
El-Erian, elaborating on a post he made on X, acknowledged his view is outside the consensus and “very unpopular.” But he noted that Powell will effectively become a “lame duck” the moment Trump announces a replacement, something that could happen much earlier than in the past, and that Powell leaving now would spare the Fed from months of attacks.
“The first best is that Powell remains until May when his tenure ends and the administration stops attacking the Fed,” he said in the interview. “But that’s not going to happen. We are nowhere near the world of first bests.”
…
Alan Blinder, the former No. 2 official at the Fed, told CNN that he “couldn’t disagree more vehemently” with El-Erian, who he knows and respects.“This would be like saying when you’re getting bullied, the best thing to do is cave in,” Blinder said during a phone interview. “I’d much rather see – and this is what I expect – Powell to fight this until the end.”
“If Powell steps aside, it creates a terrible precedent for the future,” said Blinder, now an economics professor at Princeton University.
I’m in Blinder’s camp on this one: surrender would mean that all the administration has to do is huff and puff to get what it wants. In the Frozen North, we went through all this in 1961 with the Coyne Affair, which had a similar beginning with a mostly salutary aftermath:
On the positive side, responsibility for monetary policy was clarified—something demanded by Louis Rasminsky as a condition for assuming the governorship, and which was subsequently endorsed by a Royal Commission (the Porter Commission) into the state of banking and finance in Canada. Legislative changes made it clear that the government was ultimately responsible for monetary policy, with the Bank of Canada responsible for the day-to-day conduct of policy. In the event of an irreconcilable policy disagreement, the government would issue a public directive to the Bank—an act which would cause the governor to resign. The Porter Commission also concluded that the controversial pension increase awarded to Coyne was entirely justified. On the negative side, a chill descended over the Bank’s communications strategy. Governor Rasminsky refrained from speaking publicly on economic issues for two years. As well, according to John Crow, governor of the Bank from 1987-94, the “trauma” suffered by the Bank may have dampened its willingness to fight inflation during the 1960s and 1970s when inflationary pressures began to get out of control, and which later became so costly to subdue.
And, of course, Assiduous Readers will remember my piece In this politicized climate, the Bank of Canada needs to be a lot better at communicating!
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4341 % | 2,345.9 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4341 % | 4,566.6 |
| Floater | 6.81 % | 6.88 % | 50,667 | 12.69 | 2 | 0.4341 % | 2,631.8 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1290 % | 3,678.6 |
| SplitShare | 4.76 % | 4.24 % | 56,499 | 2.44 | 7 | -0.1290 % | 4,393.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1290 % | 3,427.6 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1412 % | 2,997.7 |
| Perpetual-Discount | 5.74 % | 5.82 % | 45,865 | 14.16 | 32 | 0.1412 % | 3,268.8 |
| FixedReset Disc | 5.61 % | 6.26 % | 117,314 | 13.25 | 40 | 0.2951 % | 2,998.4 |
| Insurance Straight | 5.60 % | 5.68 % | 53,409 | 14.38 | 19 | 0.4321 % | 3,235.5 |
| FloatingReset | 5.58 % | 5.38 % | 41,541 | 14.82 | 2 | -0.3329 % | 3,671.8 |
| FixedReset Prem | 5.72 % | 5.09 % | 114,710 | 2.59 | 16 | 0.0459 % | 2,634.2 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2951 % | 3,065.0 |
| FixedReset Ins Non | 5.22 % | 5.65 % | 72,663 | 14.18 | 14 | -0.7752 % | 3,062.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IFC.PR.A | FixedReset Ins Non | -6.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 20.30 Evaluated at bid price : 20.30 Bid-YTW : 5.95 % |
| MFC.PR.L | FixedReset Ins Non | -3.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 22.72 Evaluated at bid price : 23.70 Bid-YTW : 5.65 % |
| PWF.PR.Z | Perpetual-Discount | -1.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 21.39 Evaluated at bid price : 21.70 Bid-YTW : 5.95 % |
| MFC.PR.B | Insurance Straight | -1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 20.72 Evaluated at bid price : 20.72 Bid-YTW : 5.68 % |
| PWF.PR.S | Perpetual-Discount | -1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 5.81 % |
| FTS.PR.J | Perpetual-Discount | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 5.70 % |
| SLF.PR.D | Insurance Straight | 1.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 20.92 Evaluated at bid price : 20.92 Bid-YTW : 5.37 % |
| ENB.PR.N | FixedReset Disc | 3.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 22.87 Evaluated at bid price : 23.88 Bid-YTW : 6.26 % |
| IFC.PR.I | Insurance Straight | 4.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 23.63 Evaluated at bid price : 24.10 Bid-YTW : 5.64 % |
| PWF.PR.F | Perpetual-Discount | 5.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 22.55 Evaluated at bid price : 22.80 Bid-YTW : 5.77 % |
| BN.PR.R | FixedReset Disc | 8.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 19.80 Evaluated at bid price : 19.80 Bid-YTW : 6.63 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.D | FixedReset Prem | 530,578 | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-08-30 Maturity Price : 25.00 Evaluated at bid price : 24.98 Bid-YTW : 5.29 % |
| BIP.PR.B | FixedReset Prem | 222,250 | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : 5.14 % |
| ENB.PF.K | FixedReset Disc | 187,159 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 23.12 Evaluated at bid price : 24.19 Bid-YTW : 6.49 % |
| CM.PR.Q | FixedReset Disc | 176,486 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 23.96 Evaluated at bid price : 24.97 Bid-YTW : 5.82 % |
| ENB.PR.T | FixedReset Disc | 81,350 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 21.94 Evaluated at bid price : 22.35 Bid-YTW : 6.53 % |
| PWF.PR.P | FixedReset Disc | 80,200 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-07-22 Maturity Price : 18.05 Evaluated at bid price : 18.05 Bid-YTW : 6.33 % |
| There were 13 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| See TMX DataLinx: ‘Last’ != ‘Close’ and the posts linked therein for an idea of why these quotes are so horrible. | ||
| Issue | Index | Quote Data and Yield Notes |
| BN.PF.E | FixedReset Disc | Quote: 21.07 – 27.00 Spot Rate : 5.9300 Average : 4.6096 YTW SCENARIO |
| IFC.PR.A | FixedReset Ins Non | Quote: 20.30 – 22.57 Spot Rate : 2.2700 Average : 1.4825 YTW SCENARIO |
| BN.PR.T | FixedReset Disc | Quote: 19.73 – 21.38 Spot Rate : 1.6500 Average : 0.9992 YTW SCENARIO |
| BN.PF.D | Perpetual-Discount | Quote: 20.41 – 21.90 Spot Rate : 1.4900 Average : 0.9101 YTW SCENARIO |
| MFC.PR.L | FixedReset Ins Non | Quote: 23.70 – 24.62 Spot Rate : 0.9200 Average : 0.5547 YTW SCENARIO |
| PWF.PR.Z | Perpetual-Discount | Quote: 21.70 – 22.50 Spot Rate : 0.8000 Average : 0.5309 YTW SCENARIO |