Macro Briefing: 19 June 2024

* Fed risks recession by delaying cut rates, predicts economist Claudia Sahm
* US industrial output posts strong rebound in May
* US debt as percent of GDP on track to top WWII-related peak in 2027: CBO
* Nvidia becomes most valuable public firm, overtaking Microsoft
* US retail sales rise less than expected in May:

Has the bear market in bonds ended? A proprietary indicator developed by The Milwaukee Company, a wealth manager, is leaning toward that view by offering quantitative support for thinking that the rate-hiking cycle has peaked. The opportunities look more encouraging for extending duration risk/bond maturities, based on the Bond Duration Risk Index (BDRI), a multi-factor measure of the directional bias in Treasury yields, advises a new research note from TMC Research, a division of The Milwaukee Company. The current reading of BDRI is 4 (per the chart below). Although that still reflects a middling print relative to the last several years, it’s well below the previous peak of 7, which indicated high risk. (BDRI values range from 0, or nil risk, to 7, which is high risk.) Further declines in BDRI would strengthen the case for taking on more bond market risk.