Tag: inflation

Now Maybe The Market Gets It?

Now Maybe The Market Gets It?

Perhaps now the equity market understands that it would be impossible for the Fed to normalize rates if the central bank was to take rates back down to zero in short order due to the Banking crisis or for any other reason. Wednesday's FOMC projections show that the Fed plans to keep rates elevated and … Continue reading Now Maybe The Market Gets It?

We’ve Got It All Wrong

We’ve Got It All Wrong

Americans fear for their bank deposits. Your deposits are safe. However, you should fear the remedy. The Fed bail out from last Sunday could result in $1-2 trillion of additional public debt assuming that the Fed marks up the assets of and extends loans to all U.S. banks except J.P. Morgan, Bank of America, Wells … Continue reading We’ve Got It All Wrong

Gold Safer Than Software

Gold Safer Than Software

Investors have historically moved to Gold in times of uncertainty. Gold has moved substantially higher since the market turmoil in the banking sector kicked off last week. Here's why investors should be interested in Gold: perpetual money printing by the Fed, ever larger fiscal deficits and a mounting debt load - the combination of which … Continue reading Gold Safer Than Software

The Fed’s Balance Sheet Reduction (QT) Update <span class="badge-status" style="background:red">Premium</span> 

The Fed’s Balance Sheet Reduction (QT) Update Premium 

The Fed modestly decreased its Treasury and mortgage-backed holdings during the week-ended Wednesday March 15th. Thus, the Fed simultaneously ran QT with QE running in the background in the form of the Bank Term Funding Program (BTFP). You may read about the BTFP's first week in operation by clicking HERE. Treasuries: The Fed’s Treasury security holdings … Continue reading The Fed’s Balance Sheet Reduction (QT) Update Premium 

Price Inflation Persists. Now What?

Price Inflation Persists. Now What?

Core CPI accelerated month-to-month to 0.5% (from 0.4% in January), as "Shelter" accelerated to 0.8%. Our view is that the Fed will continue to hike rates but may slow the pace of QT, particularly as it relates to Treasuries. The Fed says it will maintain interest rate hikes as the Banking sector stumbles. More importantly, … Continue reading Price Inflation Persists. Now What?

Powell’s Puzzle. Dimon A Winner.

Powell’s Puzzle. Dimon A Winner.

Fed Chair Powell has the backbone of a jellyfish. Therefore it will be interesting to see what he and his band of banking flunkies do at their FOMC meeting later this month - especially if Financials continue to trade down and should consumer prices remain elevated as we expect (CPI release is Tuesday at 8:30am … Continue reading Powell’s Puzzle. Dimon A Winner.

Labor Force Participation  – Weak

Labor Force Participation – Weak

Blame the various COVID relief packages for the weak labor force participation rate - 62.5% in February, up from 62.4% in January but down from 63.3% in February 2020 pre-pandemic. This at a time when the Biden Administration is proposing a $7 trillion budget. I'm not sure where demand for U.S. Treasuries to fund this … Continue reading Labor Force Participation – Weak