By Michael S. Derby NEW YORK, Feb 25 (Reuters) - Federal Reserve Bank of Kansas City President Jeffrey Schmid said on ‌Wednesday that overly high inflation remains a key problem ‌the central bank needs to address, but he stopped short of saying how ​monetary policy should respond. “I think we have work to do on the inflation side of things,” while “I think we're in a pretty good place for employment,” Schmid said in an appearance before the ‌Economic Club of Colorado. The ⁠bank president did not, howe ...

Financial Data and Key Metrics Changes - ARMOUR reported a total economic return of 10.63% for Q4 2025, benefiting from MBS spreads tightening and a lower interest rate environment [4] - GAAP net income available to common stockholders was $208.7 million, or $1.86 per share, with net interest income at $50.4 million [4] - Distributable earnings available to common stockholders was $79.8 million, or $0.71 per common share [4] - Quarter-end book value increased to $18.63 per common share, up 6.5% from September 30 [5] Business Line Data and Key Metrics Changes - ARMOUR's mortgage assets now total over $20 billion, with a portfolio growth of more than 10% from the end of Q3 2025 [9] - The portfolio remains nearly 100% agency MBS, agency CMBS, or US Treasuries, with over $3 billion of MBS pools added in Q4 and early Q1 [12] Market Data and Key Metrics Changes - The market is experiencing declining rate volatility and easing funding costs, supported by the Fed's efforts to lower rates [10] - Aggregate portfolio prepayments averaged 11.1 CPR through Q4 2025 and Q1 2026 to date, compared to 8.1 CPR in Q3 2025 [15] Company Strategy and Development Direction - ARMOUR views agency MBS as a high conviction opportunity, with a strategy focused on stress testing liquidity and systematic hedging [9][20] - The company aims to maintain an attractive and stable dividend, with a medium-term outlook [7][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current market conditions, anticipating continued favorable returns from MBS [10][20] - The administration's focus on lowering mortgage spreads is expected to support a stable mortgage market, with GSEs playing a crucial role [10] Other Important Information - ARMOUR raised approximately $3.8 million of capital by issuing preferred stock and has raised about $138 million under its common-at-the-market program [6][5] - The company has launched a new investor presentation to provide additional insights into its portfolio transformation [20] Q&A Session Summary Question: Outlook for portfolio and interest-bearing assets growth in 2026 - Management indicated that growth depends on market behavior and capital raising opportunities [24] Question: Incremental returns on new investments - Current levered yield on 30-year 5s is around 15%, with potential for further spread tightening [29] Question: Likelihood of government actions to lower mortgage rates - Management noted that while some actions have been taken, further measures may introduce complexities [34] Question: Current liquidity position - Liquidity is approximately 54% of total equity, reflecting moderate leverage and steady conditions [37] Question: Risk of faster prepayments with lower mortgage rates - Management acknowledged increased prepayment risk but stated that the portfolio is structured to mitigate this risk [39]

Core Viewpoint - Asian currencies are consolidating against the dollar, but may face pressure due to diminishing expectations of Federal Reserve rate cuts, which could reduce risk appetite [1] Group 1 - Asian currencies showed stability in the morning session against the dollar [1] - The potential for Fed rate cuts is fading, which may negatively impact market sentiment [1]

Fundamentals - Spot gold rose 0.2% to $4,886.69 per ounce after declining more than 2% to a more than one-week low on Tuesday [1][9] - U.S. gold futures for April delivery remained steady at $4,904.50 [1][9] - A stronger dollar makes gold more expensive for holders of other currencies [4][10] - Markets expect three 25-basis-point Fed rate cuts this year, which typically benefits non-yielding bullion [6][10] - Spot silver fell 0.8% to $72.86 per ounce after dropping over 4% in the last session [7][10] - Spot platinum gained 0.9% to $2,025.80 per ounce, while palladium added 0.5% to $1,690.54 [7][10] Market Conditions - Mainland Chinese, Hong Kong, Singapore, Taiwan, and South Korea markets are closed for the Lunar New Year holidays, leading to low trading volumes and potential volatility [5][10] - Geopolitical risks are keeping markets on edge as investors await the Federal Reserve's January meeting minutes for insights into future rate cuts [10] Economic Indicators - Chicago Fed President Austan Goolsbee indicated that the Fed could approve "several more" rate cuts this year if inflation declines to the central bank's 2% target [5][10] - Recent weak consumer price reports may mask strong service price increases [5][10]

Good Tuesday morning. Welcome back to opening bell. We're getting you ready for the trading day. First trading day of the week.Yesterday closed for President's Day. Subway wasn't too busy today. I have to say maybe a lot of people are off.Michael Gusay, CIO and global head of fixed income is with us, Principal Asset Management. Thank you so much for being with us. I was saying a lot of the folks I've been speaking with are comfortable with the 10-year bond yields being somewhere between 35 and 45, but the f ...

Core Viewpoint - The article discusses the 10 best S&P 500 stocks with the highest upside potential, highlighting the impact of a stronger-than-expected labor market on stock performance and investor sentiment [1][2][3]. Economic Context - The U.S. added 130,000 jobs in January, surpassing the 70,000 jobs expected by economists, indicating a robust labor market [1]. - The unemployment rate decreased to 4.3%, lower than the anticipated 4.4%, marking the lowest rate since August 2025 [2]. - The Dow Jones Industrial Average fell by 66.74 points (0.13%), while the S&P 500 index experienced a minimal decline, closing at 6,941.47 [2]. Market Sentiment - Market experts interpret the stock decline as a reflection of investor concerns that a stabilizing job market may delay Federal Reserve rate cuts [3]. - Analysts from Janus Henderson Investors and Navy Federal Credit Union view the job report as a positive indicator for economic growth and consumer spending [3]. Stock Selection Methodology - The selection of the 10 best S&P 500 stocks was based on market capitalizations above $10 billion, with Moderate to Strong Buy ratings and over 50% upside potential [7]. - The analysis utilized Q3 2025 13F filings to identify companies with the highest number of hedge fund investors, ranking them accordingly [7][8]. Company Highlights - **Fidelity National Information Services (NYSE:FIS)**: - Number of Hedge Fund Holders: 57 - Stock's Upside Potential: 60.59% - Recognized for benefiting from AI adoption and banking modernization, with improved margins and strong free cash flow [9][10]. - Analysts have initiated coverage with an Overweight rating and a price target of $72, despite recent challenges [11]. - **Axon Enterprise Inc (NASDAQ:AXON)**: - Number of Hedge Fund Holders: 61 - Stock's Upside Potential: 90.59% - Positioned strongly in public safety technology, with growth expected from new drone regulations and AI features [14][18]. - The Department of Homeland Security's expansion of body-worn cameras presents significant opportunities for Axon [16][17].

Asian currencies were mixed against the dollar in early trade, but could be supported by prospects of Fed rate cuts that typically bolster risk sentiment. https://t.co/KVinvgxG4I ...

Core Viewpoint - Asian currencies are experiencing mixed performance against the dollar, with potential support from expectations of Federal Reserve rate cuts that generally enhance risk sentiment [1] Group 1 - Asian currencies showed varied movements in early trading against the dollar [1] - The prospect of Federal Reserve rate cuts is anticipated to bolster risk sentiment in the market [1]

Economic Overview - The U.S. economy shows strength with tame consumer inflation and stronger-than-expected job growth, leading traders to adjust their expectations for rate cuts, resulting in lower two-year yields [1][3][4] - The labor market's strength is questioned, with suggestions that job growth numbers may be overstated by approximately 60,000 per month, indicating caution regarding future rate cuts [3][12] Inflation and Federal Reserve Policy - Recent inflation data is viewed as encouraging, with both headline and core inflation moderating, although core services continue to exert upward pressure on inflation [8][9] - Federal Reserve officials, including Governor Stephen Myron, advocate for lower interest rates, citing supply-driven changes in the economy that could support growth [5][6] - The market is pricing in a 50% chance of a third rate cut by December, but some analysts believe this is an overreaction to recent data [11][12] Bond Market Dynamics - The two-year yield has reached its lowest level since September 2022, reflecting the market's sensitivity to Federal Reserve policy [4][8] - A significant rally in the two-year note has been observed, although it remains within a tight range [4][8] - The dollar has been declining, with investors diversifying into other markets, particularly emerging markets, as the Fed eases and global economic growth continues [17][18] Corporate Debt Issuance - A surge in reverse Yankee bond sales has been noted, with U.S. companies like Alphabet and Goldman Sachs raising funds in non-dollar markets, indicating a trend towards diversifying funding sources [72][76] - The scale of recent bond sales includes Alphabet's £5.5 billion deal and Goldman Sachs' €7 billion financial bond, both experiencing strong demand [73][74] - Companies are seeking to diversify their funding to avoid pushing up borrowing costs in their home markets [76] Market Sentiment and Future Outlook - The current market environment is characterized by a mix of strong issuance and cautious investor sentiment, with credit spreads beginning to widen slightly [91][92] - Analysts suggest that while issuance may continue, there is a growing dispersion in performance among different sectors, particularly in tech and financials [93][94] - The structural increase in supply from tech companies is expected to impact spreads, with a potential regime change in how tech bonds are perceived by investors [96][115]

Core Insights - The article discusses the impact of slowing inflation on Treasury yields, with expectations that the Federal Reserve may cut interest rates at least twice this year, leading to the lowest yields of the year [3][4]. Group 1: Treasury Yields - Treasury yields across maturities declined by at least three basis points, with the two-year note falling to about 3.4%, the lowest since October 2022 [4]. - The weekly decline in yields for five- to 30-year bonds was about 15 basis points, driven by haven buying amid market volatility [6]. Group 2: Federal Reserve Policy - Traders are pricing in approximately 63 basis points of easing by year-end, indicating expectations for two quarter-point cuts and a possibility of a third cut [8]. - The consumer price index (CPI) rose less than expected in January, which may encourage the Federal Reserve to consider rate cuts [7][9]. Group 3: Market Reactions - The bond market showed resilience against stronger-than-expected employment data, which initially led traders to reconsider rate cut bets [5]. - An auction of new 30-year bonds received historically strong demand, reflecting investor confidence in Treasuries [6].