Posts Tagged ‘inflation’
February 2, 2023
It was the week that was as three main central bank interest rate decisions from the FEDERAL RESERVE, BANK OF ENGLAND and EUROPEAN CENTRAL BANK rocked the markets. There is more to follow Friday morning as the vaunted employment data will be released. The market is expecting 190,000 jobs created, a 3.6% unemployment rate, a 34.4-hour workweek and a 0.3% gain in average hourly earnings. After all of the central bank-induced volatility that last data point carries little weight unless it shocks to the robust economic upside.
If the unemployment rate fell too much — to say, 3.3% — or AHE soared above 0.7% it would send bond yields much higher, reversing the recent sizable rally in global bond prices triggered by central banks preparing to “pause.”
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Tags:Bank of England, Christine Lagarde, European Central Bank, Federal Reserve, inflation, Jerome Powell, nonfarm payrolls, rate hikes
Posted in BOE, Debt Market, ECB, Fed | 4 Comments »
November 28, 2022
When it comes to making sense of the global financial system I always have to ask the question who is benefitting from monetary policy? The recent podcasts from the Financial Repression Authority has provided a good backdrop to understanding the importance of debt markets — and by default the significance of the US DOLLAR as the bulwark of the financial system. The mobility of money or what serves the process of globalization has revealed many of the fragilities of the DOLLAR as a funding vehicle because of the FEDERAL RESERVE’S policies, which allowed all the other world’s central banks to sustain a prolonged period of zero and even NEGATIVE NOMINAL RATES.
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Tags:Ben Bernanke, deflation, ECB, Federal Reserve, inflation, Jerome Powell, QT, quantitative tightening, Robert Holzmann, Santa Mike, US dollar, yield curves
Posted in Currency, Debt Market, Fed | 4 Comments »
September 20, 2022
A quick view on Wednesday’s FEDERAL RESERVE‘s meeting: According to the newest Fed stenographer, Nick Timiraos, look for the central bank to raise rates 75 basis points in an effort to get ahead of the curse of HEADLINE inflation. This level is baked into the present market values. Look to see if there is any discussion of slowing the FED FUNDS increases as the FED tries to get a handle on the impact of $95 billion a month balance sheet unwind and a DOLLAR that has risen 14% since the beginning of the year, and more than 20% versus the Japanese yen.
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Tags:dot plot, Federal Reserve, inflation, Jerome Powell, US dollar
Posted in Currency, Fed | 19 Comments »
August 16, 2022
On Friday I sat down with Richard Bonugli at the Financial Repression Authority and Doomberg to discuss the current situation in global energy and tried to peek into the future as to where Europe and the US are going to find the means to provide dependable and affordable energy to power economic growth. Enjoy the podcast and hopefully it will lead to more high levels of discussion on all things global macro.
Click here to view the podcast.
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Tags:balance sheet unwind, Ben Bernanke, Federal Reserve, inflation, interest rates, Janet Yellen, Jerome Powell, neutral rate, portfolio balance channel, QT, rentier class, unemployment
Posted in Fed | 13 Comments »
May 10, 2022
Last week the FOMC raised rates by 50 basis points, which seemed like the most likely outcome (although interest rate markets had assigned a slight probability of 75 basis point increase). The statement was nothing if not vague about the FED‘s plans, yet the last sentence left the central bank room for flexibility: “The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
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Tags:balance sheet unwind, demand destruction, inflation, Jerome Powell, QT, U.S. Dollar, wealth destruction
Posted in Fed | 8 Comments »
May 3, 2022
Yes, Wednesday is FED day and the markets are expecting a 50 basis point increase in the FED FUNDS RATE to a range of 0.75% to 1%. The most important issue will be the size of the balance sheet unwind and whether Chair Jerome Powell is good to his heightened concerns about headline inflation means a full throttle on balance sheet shrinkage, reaching the full $95 billion a month at a quick pace. So Jerome, let’s have at it and let the markets decide the impact on myriad asset classes. In 2018, this double shotgun of QT and interest rate hikes proved too much for the highly leveraged global markets. Now that the Fed’s balance sheet is twice as large let’s see how it will affect the leverage in the global system.
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Tags:balance sheet unwind, Fed Funds Rate, Federal Reserve, inflation, Jerome Powell, QT, rate hikes, U.S. Dollar
Posted in Fed, United States | 10 Comments »
March 23, 2022
On Tuesday, I sat down with Richard Bonugli and Danielle DiMartino Booth. We traversed Ukraine, Europe, the U.S. and Danielle delved deep into the her expertise of the Federal Reserve. We discussed the recent work of Zoltan Pozsar as it has had such a great impact on the current state of global financial markets. This sets the table for Richard’s next FRA Roundtable, which will feature Mr. Pozsar, who is one of the more knowledgeable financial “plumbers.” Pour your favorite WHISKEY as the financial system is explored for potential profits involving commodities, currencies, yield curves and tangentially precious metals.
Click here to listen to the podcast.
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Tags:balance sheet, bubble, Federal Reserve, inflation, Jerome Powell, QE, unemployment
Posted in Fed | 9 Comments »
March 6, 2022
First, our hearts go out to all suffering in the world of insanity brought on by senseless wars that diplomacy OUGHT to have been able to prevent. The world always returns to the insanity that brought us to World War I when nobody could stop the trains once set in motion. As Phil Ochs sang, “It’s always the old who lead us off to war, it’s always to fall, look at all we won with the saber and the gun, tell me is it worth it all?” But here we are and as always the world continues to focus on the minutiae of life, including the financial outcomes responding to the high-speed headlines driven by algorithmic speed machines. There is no context to any news just manufactured volatility fabricators of the latest musings of some “news” outlets’ favorite expert. But as Hyman Roth said so clearly: “Michael this is the profession we have chosen.”
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Tags:asset purchases, Christine Lagarde, ECB, Federal Reserve, inflation, Jerome Powell, oil, Putin, rate hikes, Russia, sanctions, U.S. Dollar, Ukraine, wheat
Posted in Commodities, Currency, ECB, Fed, Russia, United States | 17 Comments »
February 16, 2022
Bank of England Governor Andrew Bailey made a ridiculous comment almost two weeks ago and I’d be remiss not to mention it. Bailey issued his own FORWARD GUIDANCE on how to slow the pace of inflation. He suggested that people refrain from seeking big pay raises. It’s astounding that a sitting member of the G-7 Finance Group has the temerity to restrain the AVERAGE WORKER while promoting QE policies that have stoked a serious rise in asset prices for those who own antique autos, stocks, precious metals, art, multiple homes and any other asset class on the planet.
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Tags:Andrew Bailey, balance sheet, Claudia Sahm, Federal Reserve, FOMC minutes, inflation, Jerome Powell, price controls, QT, quantitative tightening
Posted in BOE, Debt Market, Fed | 22 Comments »
February 10, 2022
On Tuesday, I sat down with the Financial Repression Authority’s Richard Bonugli and Marc Faber. The last time Dr. Faber and I spoke, there were several profitable investments that evolved from our deep discussion about the global political economy. Give it a listen as we discuss the global central banks and potential profitable areas of investment. Marc has fabulous insights on the global economy and NOTHING is out of bounds. This is a man who finds great opportunities during times of chaos.
Click here to listen to the podcast.
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Tags:CPI, fed funds futures, Federal Reserve, inflation, James Bullard, Marc Faber, quantitative tightening, rate hikes, real yields
Posted in data, Fed, United States | 15 Comments »