THE WisdomTree BLOG
After a variety of suspensions and resets, the current debt ceiling of $19.8 trillion was put in place on March 15 this year. Since then, “extraordinary measures” have been used to create room for Treasury borrowing to continue to occur. This approach has been utilized many times in the past, but at some point, these measures become exhausted, and action needs to take place. Without Congressional action, this is the position in which Treasury soon will find itself.
Shortening Duration, Getting a Second Chance
We’re six months into 2017, and investors have begun asking themselves, did rates peak yet again or will there be another leg to the upside in the second half of the year? In our opinion, the question probably needs a longer time horizon than just the upcoming July–December period.
Here we are halfway through the FOMC meeting cycle for 2017, and the policy makers appear to be right on schedule with their projected rate hikes for the year. The Fed’s own internal projections for the current calendar year projected three rate increases in the Fed Funds target range. With the June rate hike now in the books, the Fed has already implemented two of those increases.