Fed Funds Rate projections from CME Group adjusted from +.5% yesterday to +.25% today
Silicon Valley Bank implodes and voila, the Fed Funds Rate projection dropped on cue. I will tell you one thing, the moderating wage reading in the February Payrolls report is okay for our main disinflationary view, but a bank imploding under the weight of the Fed’s forced rate hike regime (a colleague advises that the losses in Silicon Valley Bank’s MBS book exceeded its tangible equity by 11.8B). Don’t these creeps ever learn? And oh look, there’s no Fed positioned to bail them out or deal with any future contagion this may or may not precede.
This graph shows yesterday’s projection vs. today’s. I think it is interesting and I don’t mind it one bit with respect to the favored view of Goldilocks eventually yielding to a coming liquidity problem for the markets. Right now, it’s just some alarming news for one mismanaged bunch of piggy knuckleheads. Maybe that’s all it is. But it’s not a good sign and it is causing players to reevaluate their Fed hawk fears.
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FTX and now this. From Spelative/Ponzi assets to VC liquidity. Not trending in a bullish direction.
Good word: trending. I agree.