Category: Economy

Used Vehicle Prices Decline As Rates Climb

Used Vehicle Prices Decline As Rates Climb

Used vehicle prices continue to decline as have sales volumes. This is not unexpected as interest rates have climbed over the past number of months. Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis), decreased 3.0% in September from August 2022. The non-adjusted price change declined 2.3% year-over-year in September. September was the … Continue reading Used Vehicle Prices Decline As Rates Climb

Is The Treasury Market Really That Illiquid?

Is The Treasury Market Really That Illiquid?

Talking heads were out in droves on Thursday speaking about the illiquid Treasury market and how it may soon crack - triggering the need for Fed intervention. Sure, yields are moving around as the Fed tightens. However, this past week's movements in the 2-Year and 10-Year Treasury yields were not any more volatile than in … Continue reading Is The Treasury Market Really That Illiquid?

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed pared its Treasury holdings over the past week at a faster pace compared to any other week during this QT period. The Fed's Treasury holdings were approximately $37.9 billion lower over the past week and $56.8 billion lower on a rolling 4-week total basis. The Fed's Government Agency holdings were unchanged over the … Continue reading The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Quest To Regain Credibility

The Fed’s Quest To Regain Credibility

The Fed's tightening is as much about its quest to regain credibility as it is about curbing inflation. The fact that prices for goods and services started to climb in 2020 and have persisted higher for two years is no surprise. The Treasury (subsidized by the Federal Reserve) mailed trillions of freshly-printed U.S. Dollars (helicopter … Continue reading The Fed’s Quest To Regain Credibility

P/E Multiples In Flux

P/E Multiples In Flux

P/E multiples will be in flux for the next few months. Phase I will begin in October. Phase II will begin in January. The sequence will look something like the following: Analysts: Many sell-side analysts will revise their December quarter Revenue and Earnings estimates downward coming off of the September quarter earnings calls beginning in … Continue reading P/E Multiples In Flux

What Would Cause The Fed To Pivot?

What Would Cause The Fed To Pivot?

Credit Markets (Yes): A liquidity crisis would cause the Fed to pivot. If the credit markets seized up the Fed would intervene. Market intervention is after all the Fed's operating model (as is the case for all central banks). Consumers and investors would have to lose confidence in the U.S. Economy to the point where … Continue reading What Would Cause The Fed To Pivot?