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Peak Policy Error

By |2022-05-27T17:33:38-04:00May 27th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Another economic discussion lost to the eventual coronavirus pandemic mania was the 2019 globally synchronized downturn. Not just downturn, outright recession in key parts from around the world, maybe including the US. We’ll simply never know for sure because just when it was happening COVID struck and then governments overrode everything including unfolding history.What anyone can say for sure is [...]

UST 2s & Euro$ Futures *Whites* Both Ask, Landmine At Last?

By |2022-05-24T19:56:19-04:00May 24th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The 2-year Treasury right now is the key point, the spot on the yield curve which is influenced mostly by potential alternative rates including those offered by the Federal Reserve. Because of this, the market for the 2s is looking forward at what those alternate rates are likely to be, then pricing yields accordingly. Since the FOMC sets those alternative [...]

RRP (use) Hits $2T, SOFR Like T-bills Below RRP (rate), What Is (really) Going On?

By |2022-05-23T20:31:15-04:00May 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You might not know it, but front-end T-bill yields are not the only market spaces which are making a mockery of the Federal Reserve’s “floor.” There are others, including the same money number the same Fed demanded the world (or whatever banks in its jurisdiction it could threaten) ditch LIBOR over. Yes, SOFR.I’ve repeatedly highlighted the 4-week Treasury bill simply [...]

‘Unconscionably Excessive’ Denial

By |2022-05-23T17:34:06-04:00May 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What would “unconscionably excessive” even look, legally speaking? More to the issue, who gets to decide what constitutes “excessive?” The way the phrase has been inserted, it’s as if Congress today seeks to plant its members on some incorporeal higher plane than mere physical substance, too, diving deep into the moral consciousness of the nation and economy in order justify [...]

Are The 2s Already Rejecting Rate Hikes?

By |2022-05-20T19:57:09-04:00May 20th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There was still another scramble for collateral yet again this morning. Nowhere near the intensity and duration of yesterday’s more massive flux, still it was obvious enough even if of the less egregious kind to only stick around for a little over an hour. Beginning at the European open (a place where recession signals are outright compounding), the 4-week bill [...]

Peak Inflation (not what you think)

By |2022-05-11T22:02:59-04:00May 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For once, I find myself in agreement with a mainstream article published over at Bloomberg. Notable Fed supporters without fail, this one maybe represents a change in tone. Perhaps the cheerleaders are feeling the heat and are seeking Jay Powell’s exit for him? Whatever the case, there’s truth to what’s written if only because interest rates haven’t been rising based [...]

Far From Stellar, Employment Likely Went Negative In April

By |2022-05-06T18:04:27-04:00May 6th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It appears as if most reactions to today’s April 2022 payroll were quite positive, maybe enthusiastic when they should not have been. Though the Establishment Survey - the CES headline number most people pay attention to - gained 428,000 over March’s tally, it was the “other” one which crashed down like last week’s negative GDP thud.From the CES view, you [...]

Collateral Shortage…From *A* Fed Perspective

By |2022-05-03T20:32:04-04:00May 3rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s never just one thing or another. Take, for example, collateral scarcity. By itself, it’s already a problem but it may not be enough to bring the whole system to reverse. A good illustration would be 2017. Throughout that whole year, T-bill rates (4-week, in particular) kept indicating this very shortfall, especially the repeated instances when equivalent bill yields would [...]

Some ‘Core’ ‘Inflation’ Difference(s)

By |2022-04-29T19:33:52-04:00April 29th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC meets next week, with everyone everywhere expecting a 50 bps rate hike to be announced on Wednesday. Yesterday’s “unexpected” and “shocking” negative GDP is unlikely to deter anyone on the committee. Most have already dismissed it as nothing more than quirky, temporary factors, not unlike when they did the same to Q1 2014’s similarly negative result. At least [...]

What, When, Nominal, Forward, Yes, Oil; or, Spreads Everywhere

By |2022-04-11T18:36:12-04:00April 11th, 2022|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

February 2005, Federal Reserve Chairman Alan Greenspan goes before Congress to tell the simple-minded politicians there about his “conundrum.” They and the media eat it up because somehow the guy was declared the “maestro.” Even so, he had a major problem and it was nothing more than LT Treasury yields doing what they do; that is, pricing less growth and [...]

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