Tag: monetary policy

Reagan’s “War On Inflation” Speech

Reagan’s “War On Inflation” Speech

Below is Ronald Reagan’s “War On Inflation” speech as conceived by ChatGPT. Ladies and gentlemen, my fellow Americans, It is with great pride and a deep sense of responsibility that I stand before you today to talk about one of the greatest challenges facing our nation: inflation. For too long, the American people have suffered … Continue reading Reagan’s “War On Inflation” Speech

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed's Treasury position was essentially unchanged for the week-ended January 25th while the Fed's Government agency/Mortgage-backed securities position was $15.2 billion lower over the last week. The housing market remains inflated in our view due the Fed's ZIRP policy in 2020 and 2021. Many suburban housing markets that saw residential properties trade at $200/SQFT … Continue reading The Fed’s Balance Sheet Reduction (QT) Update

Technology Stocks Are Not Yet In The Clear

Technology Stocks Are Not Yet In The Clear

The NASDAQ Composite has had a nice little run, up more than 9% year-to-date. However, I would exercise caution ahead of Tech earnings and the Fed's January 31st / February 1st FOMC meeting. We have written on numerous occasions that we expect management teams to take a conservative approach to 2023 Revenue and EPS guidance. … Continue reading Technology Stocks Are Not Yet In The Clear

Treasury’s Vicious Debt Cycle

Treasury’s Vicious Debt Cycle

Treasury Secretary Janet Yellen is campaigning for the U.S. to raise its debt ceiling. This is code for Treasury can't afford to pay down its debt and wants to issue new debt to pay down the old debt. Reducing fiscal spending is the answer, but Washington is used to having its cake and eating it … Continue reading Treasury’s Vicious Debt Cycle

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed significantly trimmed its Treasury holdings during the week-ended January 18th while its Agency security holdings are essentially unchanged over the same period. The Fed has treated the U.S. housing market with kid gloves over the past month, certainly so since January 1st as its Agency security position is only $1.5 billion lower month-to-date. … Continue reading The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed reduced its Treasury holdings by $43.2 billion in the week-ended January 4th. The Fed's Agency security holdings were unchanged. The Fed continues to shrink the money supply. Therefore, one should expect Treasury yields to move higher along the yield curve so long as the Fed continues to shrink the supply of money. The … Continue reading The Fed’s Balance Sheet Reduction (QT) Update