breakevens

Spreading Spreads (and JPY)

By |2018-08-20T18:56:40+00:00August 20th, 2018|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What is it that’s different in August? If there was some relative calm in global markets in June and July it certainly disappeared this month. The dollar shot higher and global liquidity indications began sinking again. Yields have fallen on safety (liquidity) instruments more apparently divorced from any other mainstream factors. One place to look [...]

Overshadowing The Multi-year CPI High

By |2018-08-13T18:15:42+00:00August 13th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Overshadowed by the “dollar” last week was the Bureau of Labor Statistics. The BLS reported the US CPI had increased in July 2018 by the highest rate since December 2011. Running at 2.95% year-over-year, consumer prices accelerated a little from June’s pace. Not only that, the CPI’s core rate of inflation sped up to 2.35%. [...]

It’s Taking Too Long, The Boom Didn’t Boom

By |2018-07-12T16:34:28+00:00July 12th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

At some point, the boom had to have boomed. We are moving into the past tense for all this now, inflation hysteria almost certainly tucked away into the economic ledger alongside four other false dawns. Data is coming in for June 2018, meaning half of this year already recorded and analyzed. It’s not what it [...]

The First Real Reality Check?

By |2017-02-08T19:14:02+00:00February 8th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With several parts of the “reflation” trade rolling over, it is worth noting that one of the last of them to join in what may be growing reconsideration or doubt is inflation breakevens. In the 5-year and 10-year maturities, breakevens were at their lowest point on February 9, 2016, and have been moving higher ever [...]

Economists Just Now Finding Evidence Against Money Printing That Markets Settled On Years Ago

By |2016-08-30T13:43:01+00:00August 30th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For a central bank, deflation is the starting point which makes inflation the emphasis. So long as there is a “small” amount of positive inflation then economists have suggested deflation, thus depression, becomes impossible. The reason for that belief is twofold, first having to do with the margin for “error”; that is a small positive [...]

You Can Actually See The Desperation

By |2015-09-25T13:58:42+00:00September 25th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

Why was Janet Yellen’s speech yesterday so highly touted? My last post might be more relevant to that appearance than what is presented here. After all, each FOMC meeting begins with a presentation from the head of the Open Market Desk usually pertaining to comprehensive liquidity (or as much as the orthodox view of it [...]

When The FOMC Completely Loses The ‘Inflation’ Argument, More Economic Downside Must Be Admitted

By |2015-08-25T17:48:58+00:00August 25th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

Lost in all the stock market focus is the renewed disaster being signaled across credit markets, “inflation” expectations in particular. Here oil prices and the “dollar’s” darkening intersect with credit and broad financial settings. Quietly, market-based measures of the anticipated future “inflation” path have crashed. Inflation breakevens in TIPS hedging were as low yesterday as [...]

Reflation Or Economic Zombie Trading

By |2015-05-11T16:38:02+00:00May 11th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

With the “dollar” off the ledger as far as a menacing factor, perceptions have begun to shift toward different if still-confused rhetoric. Figuring out fixed income isn’t always straightforward to begin with, but as the “unexpected” flirtation with deflation over the past few months threw a huge wrench into the economic boom supposedly forming the [...]

Winter That Never Ends; Or One That Never Really Began

By |2015-03-12T11:33:52+00:00March 12th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

None of the following is unexpected given the “unexpected” nature of retail sales contradicting everything that was expected. Consumers are not acting like they “should” as the unemployment rate describes its version of the economy. From Bloomberg: Purchases unexpectedly dropped 0.6 percent, a third consecutive decline, Commerce Department figures showed Thursday in Washington. The median [...]