After reviewing market and macro news for the week of March 28-April 1, DoubleLine’s Jeff Mayberry and Samuel Lau – in the international spirit of the just-unveiled men’s World Cup draw – field a question from Charles, a listener in France, on whether we should be paying attention to the real U.S. Treasury yield curve over the nominal yield curve in the wake of the Federal Reserve’s balance-sheet expansion since the Global Financial Crisis and in the COVID-19 era (20:04)*. Charles also asks if the increased steepening of the real yield curve this year should spur the Fed to be more aggressive in hiking the target federal funds rate. Basically, Jeff and Sam seek to answer: Are things different this time? They say no. With help from the DoubleLine team, they discuss the Fed’s lack of control over the real yield curve, which is mainly shaped by the market (22:12), and the real yield curve’s use as an economic indicator (27:49).
Jeff and Sam review a mixed March 28-April 1 market week as well as a rough first quarter, including the Agg’s worst quarter since 1980 (2:42). Their rundown of Macro Land includes some surprises, including home prices to the up side and personal spending to the down side, and more signs of a strong labor market (13:55). Next week will bring a chance to dig in to the minutes from the Federal Open Market Committee’s March meeting. This episode was recorded April 1, 2022.
*For more information on the U.S. Treasury yield curve, check out:
MMM Episode 52: Yield Curve Flattening as an Economic Indicator
Mr. Mayberry joined DoubleLine in 2009. He is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives‐based and multi‐asset strategies. Mr. Mayberry is a Strategist on the Fixed Income Asset Allocation (FIAA) committee and a contributing member on our Global Asset Allocation and Macro committees. He also co-hosts DoubleLine’s weekly Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcast. Prior to DoubleLine, Mr. Mayberry was a Senior Vice President at TCW for nine years within the Mortgage Group, where he specialized in portfolio and fund monitoring and analytics. He holds a B.S. in Engineering from Harvey Mudd College and an M.S. in Financial Engineering from the Peter F. Drucker Graduate School of Management at Claremont Graduate University.
Mr. Lau joined DoubleLine in 2009. He is a Strategist on the Fixed Income Asset Allocation (FIAA) Committee and a contributing member on the Global Asset Allocation and Macro committees. Mr. Lau is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives-based and multi-asset strategies, including DoubleLine's Shiller Enhanced CAPE®, Shiller Enhanced International CAPE®, Real Estate and Income, and Multi-Asset Trend strategies. He also co-hosts the Sherman Show (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) and Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcasts. Prior to DoubleLine, Mr. Lau was a Vice President at TCW where he worked under Jeffrey Gundlach as a Research Analyst in the Mortgage Group. He holds a B.S. from the University of Wisconsin, Madison and an MBA from the Marshall School of Business at the University of Southern California.