Fixed-Income Annual Returns And Falling Crude Oil Prices

2025-05-05 11:21:00 ET

Summary

• Crude oil was down 4% Sunday night, as OPEC once again announced a production increase, a move by OPEC that will eventually help US inflation, and give the Fed another reason to lower the fed funds rate.
• The 10-year annual return on the TLT is still negative, and has been for a year or so.
• I do think the fed funds rate can be cut to 2.75%–3%, since meaningful budget deficit reduction, is on its face, contractionary for the US economy, and with that lower fed funds rate, we could see nice rallies in longer-maturity Treasuries as this unfolds.

Crude oil was down 4% Sunday night, as OPEC once again announced a production increase of 411,000 bpd (barrels per day), a move by OPEC that will eventually help US inflation, and give the Fed another reason to lower the fed funds rate....

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