Operating at the Intersection of Technology and the Capital Markets
Tag: inflation
The two paragraphs below are excerpts from the Fed's "Staff Economic Outlook" section of the FOMC meeting minutes published today. The Fed is disingenuous in that it does not acknowledge the fact that it inflated the money supply, thus resulting in higher prices. In fact, years ago the Fed used to define inflation as "inflation … Continue reading FOMC Minutes: More Fed Propaganda
So much for the Fed trimming its Balance Sheet by $95 billion per month. The Fed has expanded its asset base during the month of August. Fed assets stood at $8.9 trillion as of Wednesday August 10th. It is difficult to allocate this Federal Reserve any credibility as it relates to mitigating price inflation or … Continue reading QT or QE?
Sure, the U.S. Dollar may be strong as of late versus other currencies, but when measured versus the price of gold, the USD has experienced significant value destruction over the years as a result of the Federal Reserve's persistent money printing. The USD has lost 98% of its value versus gold since August 1971 when … Continue reading The Strong U.S. Dollar. Or Is It?
This bear market rally feels more driven by FOMO than the fundamentals. What is there to get so excited about as to justify this rally off of the June lows? Inflation: Is the fact that headline CPI slowed to 8.5% from 9.1% really anything to write home about? Core CPI plus Food was up 1.4% … Continue reading This Bear Market Rally Is Overdone
We believe the Fed will continue to raise rates into next year regardless of where the CPI comes in over the next several months. Today the market is trading up as the headline CPI print came in lower than consensus estimates. We believe the market is missing the bigger picture. This CPI / Fed Funds … Continue reading Where We Differ With The Market
We wrote yesterday that we would be surprised if the Fed follows through on its stated plan to reduce its balance sheet by $95 billion per month as it seeks to unwind the heavy hand it played in 2020 and 2021 by subsidizing fiscal stimulus programs and executing its QE program. Robust Fed balance sheet … Continue reading No QT as Far as The Eye Can See
If July Core CPI comes in higher than the 5.9% figure reported for June we believe there will be a 50% probability that the Fed could raise the Fed Funds Rate in August rather than wait for the September 20-21 FOMC meeting. The Fed is nowhere near a neutral rate (as we wrote earlier this … Continue reading A Fed Hike In August?
We expect headline CPI for July to modestly retreat from June's 9.1% print when CPI data is released on August 10th. Our rationale is simple - the price of oil has retreated. We expect CPI less Energy to climb as our real world experience suggests that price increases have broadly accelerated. Similarly, we expect Core … Continue reading July CPI: Headline Down, CPI Ex-Energy Up
If voted into law the Inflation Reduction Act will ensure more deficit spending, more Federal debt, more taxes, negligible Real GDP growth, low interest rates and high inflation - a recipe for continued Stagflation. What does stagflation look like? You are living it. The earmarks of stagflation are high inflation, high Federal debt and negligible … Continue reading Inflation Reduction Act Ensures Stagflation
The PCE index came in today at 6.76% Year-Over-Year growth, up from May's 6.32% Year-Over-Year print. The chart below plots the PCE index vs. the CPI in terms of the Year-Over-Year percentage change as measured each month.The consensus amongst investors seems to be that the Fed will pivot in Q1 2023. We are not so … Continue reading Investors Shrug Off More Inflation Data
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