Insights

U.S. Treasury prices climbed in January as foreign and domestic investors took advantage of attractive all-in yields offered in fixed income. The 2-year/10-year curve inverted further to -70 basis points (bps) and the 10-year U.S. Treasury yield closed at 3.54%. TIPS performance was flat verse nominals, as headline CPI data came in with the first negative month-over-month print since 2020.

 

Since its ratification in August, the Inflation Reduction Act (IRA) has been the focus of policymakers, businesses, and investors worldwide as they seek to understand the risks and opportunities associated with the U.S. climate spending bill. 

The Federal Open Market Committee (FOMC) met today for the first of eight times in 2023 to assess the state of the U.S. economy and monetary policy.

On January 13, 2023, U.S. Secretary of the Treasury, Janet Yellen, sent a letter to Congressional leadership to inform them that the outstanding debt of the United States was projected to reach its statutory limit of $31.381 trillion on January 19, 2023. When the limit was reached, the Treasury had to start taking extraordinary measures to prevent the United States from defaulting on its obligations.

 

In this issue of our Event-Driven Update, we discuss M&A deal activity in 2022. Looking ahead into 2023, we expect that financial sponsors will drive the bulk of deal activity. In the SPAC market, IPO activity slowed to a trickle, and SPAC-related merger activity witnessed a slight revival in the fourth quarter.

As 2022 ends (and what a year it has been!), markets and central bankers may agree the worst is behind us, with equities experiencing the worst drop since 2008 and the U.S. Aggregate bond index marking the largest annual loss since its 1979 inception.

Though a new year has officially begun, global communities are still navigating the same risks, including war, inflation, COVID-19, and severe weather. 

BOSTON, MA, December 14, 2022 -- The Federal Open Market Committee (FOMC) met today today for the last time in 2022 to evaluate the state of the U.S. economy and monetary policy.

The FOMC raised rates another 75 basis points (bps) in November. Yields fell and the curve flattened after October inflation data surprised to the downside. The 10-year U.S. Treasury yield closed on the lows for the month at 3.62%. The 2-year/10-year curve inverted further to -74 bps, signaling a looming recession and expectations of a Fed pivot in the future.

As expected, tension was high at this year’s international climate change conference, COP27, as global policymakers debated the key challenges and potential solutions needed to keep the goals of the Paris Agreement within reach.