So Kevin Warsh has been confirmed as Fed Governor:
Warsh was confirmed in a 54-45 vote, mostly split along party lines, with only Democratic Sen. John Fetterman of Pennsylvania crossing the aisle to vote in favor of Warsh’s nomination. It was the most partisan vote for a Fed chair nominee in history, underscoring the unease among Democrats with Trump’s fight against the Fed, though Republicans broadly welcome Warsh’s leadership.
Warsh is widely viewed as more aligned with President Donald Trump, who has long demanded rate cuts, but he is set to take office as inflation pressures intensify due to the US-Israeli war with Iran. Inflation jumped to a three-year high in April, according to the latest Consumer Price Index, and now outpaces wage growth.
…
The incoming Fed chief has proposed or hinted at reducing the size of the Fed’s $6.7 trillion balance sheet; coordinating more closely with the Treasury Department on the balance sheet; cutting back on the number of policy meetings each year from eight to as little as four; hosting fewer news conferences; shrinking the size of the Fed’s Washington-based workforce; and not providing frequent hints on the path of interest rates. According to JPMorgan analysts, all those changes would be within the remit of Warsh’s power as chair.
It was announced yesterday that US CPI jumped:
Prices rose 0.6% on a monthly basis, driving the annual rate to 3.8%, the highest since May 2023, according to the latest Consumer Price Index data released Tuesday by the Bureau of Labor Statistics.
Economists had expected prices to rise 0.6% from March and for the annual rate to climb to 3.7%.
Prior to the late-February US-Israeli strikes on Iran, inflation had eased to 2.4%. It leaped higher in March, and now, the energy price shock from the Iran war is further compounding longstanding affordability concerns for Americans weighed down by years of fast-rising prices.
…
Paychecks grew 3.6% from April of last year, on average; prices rose 3.8%.
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Wealth inequality has widened in recent years. Lower- and middle-income households are experiencing increased strain and having a harder time keeping up and managing debt.Separate data released Tuesday by the Federal Reserve Bank of New York showed increased rates of consumers becoming seriously delinquent on their loans, particularly their student loans.
… and today it was the PPI’s time to roar:
PPI, a measure of wholesale inflation, increased in April to 6% on an annual basis from 4% in March, well exceeding economists’ expectations. On a monthly basis, the index increased 1.4%, according to data released Wednesday by the Bureau of Labor Statistics. That’s twice the pace that economists expected. It’s also the second-largest monthly gain dating back to the index’s inception in 2010.
A 15.6% increase in gas prices accounted for 40% of the increase in prices businesses paid last month. That only looks to be getting worse with oil prices yet to reach their peak levels and global inventories falling at a record pace, according to a report released Wednesday by the International Energy Agency.
But the picture is still ugly for businesses even when excluding the volatile categories of food and energy. That measure, known as core PPI, rose 1% for the month, pushing the annual rate to 5.2%.
| 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 | -0.1696 % | 2,531.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1696 % | 4,800.8 |
| Floater | 5.67 % | 5.86 % | 48,893 | 14.08 | 3 | -0.1696 % | 2,766.7 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0394 % | 3,658.7 |
| SplitShare | 4.76 % | 4.74 % | 53,737 | 2.81 | 5 | 0.0394 % | 4,369.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0394 % | 3,409.0 |
| Perpetual-Premium | 5.78 % | 4.91 % | 53,797 | 0.08 | 3 | -0.1058 % | 3,042.5 |
| Perpetual-Discount | 5.61 % | 5.66 % | 52,956 | 14.34 | 30 | 0.0914 % | 3,359.5 |
| FixedReset Disc | 5.58 % | 5.85 % | 103,083 | 13.82 | 24 | 0.1104 % | 3,342.1 |
| Insurance Straight | 5.48 % | 5.57 % | 53,641 | 14.44 | 22 | -0.0495 % | 3,287.8 |
| FloatingReset | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1104 % | 3,975.8 |
| FixedReset Prem | 5.97 % | 4.36 % | 89,008 | 2.31 | 24 | 0.1236 % | 2,659.7 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1104 % | 3,416.3 |
| FixedReset Ins Non | 5.12 % | 5.38 % | 69,377 | 14.26 | 14 | -0.6912 % | 3,226.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.F | FixedReset Ins Non | -10.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 19.25 Evaluated at bid price : 19.25 Bid-YTW : 5.94 % |
| MFC.PR.K | FixedReset Ins Non | -2.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 23.62 Evaluated at bid price : 25.34 Bid-YTW : 5.42 % |
| MFC.PR.L | FixedReset Ins Non | -1.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 23.36 Evaluated at bid price : 25.00 Bid-YTW : 5.38 % |
| GWO.PR.Q | Insurance Straight | -1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 22.55 Evaluated at bid price : 22.80 Bid-YTW : 5.72 % |
| MFC.PR.C | Insurance Straight | -1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 21.46 Evaluated at bid price : 21.46 Bid-YTW : 5.33 % |
| GWO.PR.T | Insurance Straight | -1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 22.65 Evaluated at bid price : 22.90 Bid-YTW : 5.69 % |
| PWF.PR.A | Floater | -1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 14.22 Evaluated at bid price : 14.22 Bid-YTW : 5.51 % |
| PWF.PR.L | Perpetual-Discount | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 22.14 Evaluated at bid price : 22.42 Bid-YTW : 5.73 % |
| IFC.PR.M | Perpetual-Discount | -1.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 24.27 Evaluated at bid price : 24.65 Bid-YTW : 5.64 % |
| IFC.PR.K | Insurance Straight | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 23.37 Evaluated at bid price : 23.81 Bid-YTW : 5.57 % |
| NA.PR.K | FixedReset Prem | 1.16 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2029-05-01 Maturity Price : 25.00 Evaluated at bid price : 28.00 Bid-YTW : 3.48 % |
| CU.PR.D | Perpetual-Discount | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 21.75 Evaluated at bid price : 22.00 Bid-YTW : 5.57 % |
| FTS.PR.H | FixedReset Disc | 1.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 20.80 Evaluated at bid price : 20.80 Bid-YTW : 5.48 % |
| BN.PF.D | Perpetual-Discount | 1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 21.46 Evaluated at bid price : 21.46 Bid-YTW : 5.80 % |
| CU.PR.J | Perpetual-Discount | 1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 21.40 Evaluated at bid price : 21.40 Bid-YTW : 5.57 % |
| BN.PR.T | FixedReset Disc | 1.82 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 22.45 Evaluated at bid price : 22.99 Bid-YTW : 5.85 % |
| GWO.PR.I | Insurance Straight | 2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 20.96 Evaluated at bid price : 20.96 Bid-YTW : 5.45 % |
| IFC.PR.A | FixedReset Ins Non | 2.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 22.38 Evaluated at bid price : 22.75 Bid-YTW : 5.37 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| FFH.PR.K | FixedReset Prem | 257,100 | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.44 Bid-YTW : 3.71 % |
| BN.PF.I | FixedReset Prem | 151,200 | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.45 Bid-YTW : 4.06 % |
| ENB.PF.C | FixedReset Disc | 57,236 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 22.83 Evaluated at bid price : 23.90 Bid-YTW : 6.03 % |
| MFC.PR.I | FixedReset Ins Non | 50,300 | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-09-19 Maturity Price : 25.00 Evaluated at bid price : 25.98 Bid-YTW : 3.68 % |
| CU.PR.J | Perpetual-Discount | 32,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 21.40 Evaluated at bid price : 21.40 Bid-YTW : 5.57 % |
| CU.PR.H | Perpetual-Discount | 25,300 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-05-13 Maturity Price : 23.69 Evaluated at bid price : 23.96 Bid-YTW : 5.48 % |
| There were 7 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 |
| MFC.PR.F | FixedReset Ins Non | Quote: 19.25 – 21.54 Spot Rate : 2.2900 Average : 1.2977 YTW SCENARIO |
| CU.PR.J | Perpetual-Discount | Quote: 21.40 – 22.50 Spot Rate : 1.1000 Average : 0.7895 YTW SCENARIO |
| MFC.PR.K | FixedReset Ins Non | Quote: 25.34 – 26.49 Spot Rate : 1.1500 Average : 0.8558 YTW SCENARIO |
| MFC.PR.I | FixedReset Ins Non | Quote: 25.98 – 26.98 Spot Rate : 1.0000 Average : 0.7292 YTW SCENARIO |
| MFC.PR.B | Insurance Straight | Quote: 22.15 – 22.99 Spot Rate : 0.8400 Average : 0.5991 YTW SCENARIO |
| CCS.PR.C | Insurance Straight | Quote: 23.00 – 23.80 Spot Rate : 0.8000 Average : 0.5784 YTW SCENARIO |