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Another Attempt At QE/Inflation

By |2022-02-02T19:57:56-05:00February 2nd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You have to hand it to Willian Dudley. Having committed one egregious error after another while in charge of the Fed’s New York-based Open Market Desk during the first Global Financial Crisis, Bill was kicked upstairs anyway to run that entire central bank branch following the debacle. He then continued on in the same spirit and with the same results. [...]

Not Just Where They Area, Where They Seem To Be Heading

By |2022-02-01T20:09:10-05:00February 1st, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By no means are any of these PMI numbers terrible. In the vacuum of mainstream Economics' ceteris paribus fantasy, these might all be mildly pleasing. There is no such thing, however, and despite where they now are these are verging closer to comparisons which could be, several already have been, concerning. As such, the direction and trend being established as [...]

The Hawks Circle Here, The Doves Win There

By |2022-01-21T18:44:35-05:00January 21st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’ve been here before, near exactly here. On this side of the Pacific Ocean, in the US particularly the situation was said to be just grand. The economy was responding nicely to QE’s 3 and 4 (yes, there were four of them by that point), Federal Reserve Chairman Ben Bernanke had said in the middle of 2013 it was becoming [...]

Eurodollar Futures Curve Update (spoiler: still inverted)

By |2022-01-14T20:00:49-05:00January 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I guess I took my own advice a little too literally. I did write that when the eurodollar futures curve first inverted, it was going to be dull. Didn’t start out that way, of course, with a small bit of theatrics right during that front week in December when the inversion first showed up. Ever since then, it has stuck [...]

The Historic Christmas Binge

By |2022-01-14T17:00:05-05:00January 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The reason that store shelves are occasionally empty, as any social media hashtag trend will tell you, is that Americans are still buying an amazing amount of goods. For December 2021, Christmas was hardly canceled. The Census Bureau today reported that retailers during the biggest month of last year, of every year, grabbed an astoundingly huge $714 billion in overall [...]

Taper Discretion Means Not Loving Payrolls Anymore

By |2022-01-07T20:39:51-05:00January 7th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When Alan Greenspan went back to Stanford University in September 1997, his reputation was by then well-established. Even as he had shocked the world only nine months earlier with “irrational exuberance”, the theme of his earlier speech hadn’t actually been about stocks; it was all about money.The “maestro” would revisit that subject repeatedly especially in the late nineties, and it [...]

ISM’s ‘Inflation’ Number Went Way Down (again)

By |2022-01-04T17:47:59-05:00January 4th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Because there is no actual money in monetary policy, central banks have forced themselves (by having abandoned the monetary system decades ago) into an economic role that looks something like a hypnotist’s. Inflation is a monetary phenomenon, the man said, but in lieu of any practical experience in money what is a central bank to do?Manipulate emotion. Give it a [...]

As The Fed Tapers: What If More Rapid (published) Wage Increases Are Actually Evidence of *Deflationary* Conditions?

By |2022-01-03T20:16:51-05:00January 3rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since the Federal Reserve is not in the money business, their recent hawkish shift toward an increasingly anti-inflationary stance is a twisted and convoluted case of subjective interpretation. Inflation is money and if the Fed was a central bank the issue of consumer prices wouldn’t necessarily be simple, it would, however, be much simpler: is there or isn’t there too [...]

Inflationary Overheating, Tapering and Terminating QE, We’ve Seen These Before And It Didn’t End The Way It Was Supposed To

By |2021-12-30T12:23:09-05:00December 30th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The economy was in danger of running hot, too hot they all said. In order to stay ahead of such inflation potential, as central bankers saw it, first it would be necessary to wind down quantitative easing. Taper then terminate. After that, rate hikes.Hawks buzzing around everywhere.But Mario Draghi’s ECB had a problem. The inflationary pressures were there, he reasoned, [...]

Start Long With The (long ago) End of Inflation

By |2021-12-21T19:57:18-05:00December 21st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With the eurodollar futures curve slightly inverted, the implications of it are somewhat specific to the features of that particular market. And there’s more than enough reason to reasonably suspect this development is more specifically deflationary money than more general economic concerns. What I mean is, those latter have come later (“growth scare”) only long after the world’s real money [...]

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