Posts Tagged ‘FOMC’

Notes From Underground: How To Deal With Transitory Data

March 18, 2021

First, thank you to allĀ  who filled in for me as I spent nine full days packing up my life in Chicago. Raising four children and being the repository for many of my loved ones “stuff” resulted in a drowning in memories as well as material possessions that raised questions about what the HELL was that for and why? Our last post was March 1 but I am proud to point out that there were about 74 comments on that entry, all but mine being extremely valuable. Thank you to all for the way you raised the bar for discourse even higher.

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Notes From Underground: Extra! Extra! Read All About It

February 11, 2021

On Wednesday, FEDERAL RESERVE Chairman Jerome Powell emphasized, yet again, that he and the FOMC believe UNEMPLOYMENT in real terms using its broad measure is about 10%. The recent release of labor statistics revealed a 6.3% unemployment rate but Powell stressed in his Q&A at Economic Club of New York that “the statistic doesn’t capture the full extent of labor market slack.” Bloomberg’s Craig Torres finally gave credence to the idea that Jerome Powell is focused on ending the present disparity between minority and white employment as Powell used FED data to clarify the black unemployment rate was 9.2% versus 5.7%.

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Notes From Underground: Have You All Lost Your Minds?

January 28, 2021

No, I am not referring to the gyrations in the realm of heavily shorted stocks and the attacks by the populace of Sherwood Forest to drive valuations ever higher.

The insanity following Wednesday’s FOMC statement and the Powell press conference leaves me contemplating the works of Kindleberger and Minsky. Complacency in financial markets relying on the kindness of strangers is setting the course for continued madness in all financial asset classes. The POWELL PRESS CONFERENCE YIELDED WHAT OUGHT TO HAVE BEEN THE HEADLINE FOR ALL FINANCIAL NEWS: FED CHAIR POWELL SAYS REAL UNEMPLOYMENT RATE IS 10%.

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Notes From Underground: Was Powell’s Press Conference Loaded for Bears?

December 18, 2020

Wednesday’s FOMC release and the Jerome Powell press conference provided the market with enough ammunition to power even higher and send the DOLLAR lower. There was NOTHING hawkish about the FED decision regardless of the conclusions drawn from the ridiculous forecast from the SUMMARY OF ECONOMIC PROJECTIONS, which have as much value as teats on a bull. The SEPs have been never met in all the years the FED has released them as “quality” forecasts. Why did the market resolve to take a DOVISH view?

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Notes From Underground: Waiting for Godot, or Waiting for Jerome?

September 15, 2020

President Donald Trump has had his issues with his own hand-picked Federal Reserve Chairman Jerome Powell. At one point there were even discussions about Trump attempting to demote the chairman if not “firing” him for failure to keep interest rates low enough to finance the massive budget deficits. The Covid pandemic, coupled with 2019’s Powell pivot, seems to have satisfied the President’s lust for negative REAL YIELDS as Powell is no longer the object of Twitter derision. (more…)

Notes From Underground: Into the Dark Recesses of My Mind

March 3, 2020

Three weeks ago we at NOTES FROM UNDERGROUND suggested the Fed needed to cut interest rates by 50 basis points in an effort to get ahead of the potential negative economic fallout from a DEMAND SHOCK caused by the Covid-19 virus. But the rate cut was to be presented with the caveat that this was an economic cut and financial considerations were not involved. If the demand shock from the VIRUS never materialized the cut would be RESCINDED. After announcing an emergency cut Tuesday Chairman Jerome Powell took a few questions from the media.

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Notes From Underground: So Many Insights

November 5, 2019

On October 31, I had the pleasure of the recording a discussion with Anthony Crudele and the always insightful Jim Bianco. These spots with Futures Television provide context to many things discussed in NOTES FROM UNDERGROUND. I have been fortunate to have been chosen to appear with many high level global macro analysts.

Then on Sunday, I spoke with FRA’s Richard Bonugli and Dr. Marc Faber, one of the most heralded analysts in the global macro world. We covered the important issues for fifty-five minutes. It is my pleasure to share both of these conversations with you all.

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Notes From Underground: Should We Fear the Repo Man?

September 17, 2019

Just as Saudi Arabia was becoming less of a story the NEW YORK FED‘s mishandling of Tuesday’s repo operation has created a new round of angst for traders if not investors. The best coverage on the FED‘s recent efforts to calm the overnight funding markets (and repo turmoil) has been done by Liz Capo McCormick and Alex Harris at Bloomberg News. Now they have another article out discussing another REPO operation tomorrow morning.

Tuesday’s operation injected $53 billion of liquidity, even though $75 billion was on offer. While the FUNDS level went as high as 10% today the repo operation brought the level down to 2.50% to 2.25%, calming fears of any type of solvency/liquidity situation. Even though we’re around the 11th anniversary of the Lehman Brothers collapse, It has been a decade since the markets had to be truly focused on the FUNDING marketsĀ  so many people are left with more questions than answers.

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Notes From Underground: Another Fine Mess You Got Us Into, Olli Rehn

August 18, 2019

The Federal Reserve just won’t admit that President Trump and the European Central Bank are holding its policy designs captive. Trump ramps up talk of tariffs in an effort to keep the financial markets uncertain while the ECB wishes to pursue an ever expanding balance sheet in an effort to reach an ambivalent inflation target. There is no doubt that REAL YIELDS throughout the European Union are NEGATIVE. Even the Italian 10-year is trading around 1.35%, which is below the inflation level however dubious it is calculated.

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Notes From Underground: Unemployment Data? Frankly, I Don’t Give a Damn

August 1, 2019

Usually, when the first Friday of the month comes around my concern turns to nonfarm payrolls and average hourly earnings. But after the Powell press conference on Wednesday and Trump’s tariff tweets Thursday, my analysis is Gone With the Wind. As I discussed in the last few blog posts, Trump’s tweets on tariffs have cornered the Powell Fed as concerns arise over just how much global growth is going to be negatively impacted.

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