Just Another Boring Post About the 2yr Yield

After yet another viewing of a widely followed Twitter muckraker calling out Jerome Powell with righteous sounding outrage and indignation (and getting the troops all riled up with likes and re-tweets) I hereby bore you to death with reality.

Jerome Powell was very stern in September, October and November as the perma-bulls begged and Trump bullied.

Now the goddamn perma-bears are bitching and moaning because he rolled over to the powers that be.

It all makes great copy and easy but lazy ‘analysis’ for self-promoters (AKA the loudest guys in the room) to gain attention. Cartoon Nation. He who issues the loudest, most colorful and thereby most believable statements wins (the battle for hearts, minds and eyeballs). Unfortunately, he only wins followers who, in the long run, lose their money following a blow hard.

2 year treasury yield

Stay off the crack and realize that the barometer for the Fed – the bond market and specifically short-term bonds like the 2yr – generally directs the Fed. Sure, SPX tanked badly into late December but so too did the 2yr yield. The Fed then issued a collective “rut roh!” and changed course.

Now, wouldn’t it be interesting if the 2yr proves to have been on a false breakdown while the stock market rallies? I am not saying that is going to happen, but if it does you watch how well the Fed then re-adapts to the new reality.

Meanwhile, in service to mental and financial health, bears especially should stop seeing conspiracies around every corner. They are only around every other corner, ha ha ha.

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