Two important macro indicators remain intact

Junk-related credit spreads and inflation expectations remain tame and aloft, respectively Both of these indicators are intact to the inflation that the Fed created and by extension, the widespread speculation that the Fed also created and is trying to shove back in a box currently. As noted back December, the Fed is not directing markets but indicators like these are. It is not only status … Continue reading Two important macro indicators remain intact

The Fed’s inflated cake and a ‘quant’ of history [w/ edit]

A stroll through recent and not so recent inflationary history [edit] Some wording and a couple typos cleaned up from original post, no changes to themes… A Cynical Fed is a Dangerous Fed On ‘Fed minutes Wednesday’ the media amplified the noise, the machines are doing what the machines do and running with it, and it’s all eyes on the great and powerful Fed (of … Continue reading The Fed’s inflated cake and a ‘quant’ of history [w/ edit]

Machines turn markets south on what everybody already knows

That would be the Fed minutes and the ‘taper’ I mean, the market can go bearish at any time. It can hold its supports and go bullish. It can rotate itself as it sees fit. But one thing it won’t do is go down because the Fed minutes got released. That’s ‘machines gone wild’ type stuff. Best to tune out noise like this. For “best … Continue reading Machines turn markets south on what everybody already knows

The Wizard speaks

Watch Fed Chairman Jerome Powell speak after the central bank’s market-moving policy decision You may listen to the man talk about putting the Genie back in the bottle at the link above. What an assured and measured sounding man. It sure does sound like he has it all under control. Maybe this is all that’s needed. Gold bugs, Austrian economists be damned. Let the Genie … Continue reading The Wizard speaks

indicators

Fed Funds Rate, CRB & 2yr yield; a macro picture

2-year Treasury yield indicates rising Fed Funds to come The link between commodities and Fed policy has been hit or miss (at best). However, when you add in the 2 year yield, AKA the short end of the bond market that is directing the Fed, you can see a better correlation to the Funds Rate. Indeed, in 2013 (which you will recall was the beginning … Continue reading Fed Funds Rate, CRB & 2yr yield; a macro picture

Stuffing it back in the bottle!

The inflation Genie, that is… In this great adventure, the Fed creates inflation and then attempts to put it back in the bottle. Good luck with that! Federal Reserve: “Get back in that damn bottle, you bastard!” After last spring’s inflationary hysteria by the public… …and to this very day its lagging effects (click pic, get article)… …the distinguished members of the FOMC will conspire … Continue reading Stuffing it back in the bottle!

fomc

Speed readers at the ready; November FOMC Statement

Translation: We inflated out of panic beginning in Q1 2020 and we are still inflating, but at a tiny increment less. Furthermore, the committee stands ready to continue the inflationary operation at any such time that our indicators may start to fade, given the recent pullback in inflation expectations and our unfilled goal of burdening you with inflation of 2% or more. What’s more, we … Continue reading Speed readers at the ready; November FOMC Statement

Bond market to buy the news?

FOMC is set to cease bond buying The worst kept secret in the financial world is that the Fed is going to taper the bond buying macro manipulation that kick started the inflation trade and the cyclical economy along with it. That would theoretically be bond-negative and yield-positive. But is it possible that long-term Treasury bonds have already been sold down pre-announcement, with a decline … Continue reading Bond market to buy the news?

Garden variety inflation… or Stag?

More indicators are triggering to the inflation view Giving the finger to the Fed’s pretense as inflation fighters (taper: ooh, they must mean it) more market signals are tripping inflationary. There are still a couple holdouts and a caveat here or there. But my indicators are coming in line and as they stand now are biased to flipping the bird to the Fed and its … Continue reading Garden variety inflation… or Stag?

fomc

Tapering “may soon be warranted”

FOMC statement So there you have it… The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved … Continue reading Tapering “may soon be warranted”

Gold/Silver Ratio: “Slowly I ‘toined…”

The turn upward in the Gold/Silver Ratio has brought a degree of market upset The question now is whether that is all. Was the GSR simply forecasting Evergrande and associated systemic hype or something worse? And by “worse” I don’t mean the Fed pretending that it really wants to start tapering and go hawkish. As belabored often, the Fed was forced into a hawk suit … Continue reading Gold/Silver Ratio: “Slowly I ‘toined…”

The Vampire speaks

Jerome Powell speaks about policy as inflation indicators invite the Fed to continue its course (thanks to the summer cool down) It appears that things cooled a little too much for some peoples’ comfort. Remember, the (inflating) vampire needs to be invited into your macro house. The 30yr Treasury yield has done that this summer as the Continuum drops and makes its right side shoulder. … Continue reading The Vampire speaks