After FEDERAL RESERVE Chairman Jerome Powell’s Jackson Hole speech, the jobs data may have taken on added significance. Inflation was not a concern for Powell as that is considered transitory within the bowels of the FOMC. The failure of the employment situation to enable all who lost jobs due to COVID “through no fault of their own” has regained paramount importance.
Posts Tagged ‘U.S. Dollar’
Notes From Underground: Will It Be An Inflated Jobs Report?
September 2, 2021Notes From Underground: Powell’s Pathetic Political Posturing
August 29, 2021First of all, my offer of any part of a $10,000 bet with 10-1 odds against Jerome Powell being renominated as FED CHAIR is OFFICIALLY RESCINDED. The Fed Chair’s speech was so pathetic that it can only be explained by his desire to be renamed central bank head. Powell’s speech would be called DOVISH on any given week but there were six FED presidents speaking out in favor of moving up the schedule for tapering QE to counterpunch. It was not only the increased hawkish stances of previous UBER DOVES, which provided cover for Powell but the highly esteemed Mohammed El-Erian and Larry Summers also called for the FED Chair to be bold at Jackson Hole.
Notes From Underground: Before I Break
August 15, 2021On Sunday, we acknowledge the 50-year anniversary of Richard Nixon’s decision to close the GOLD EXCHANGE WINDOW and put an end to the post-World War monetary system known as Bretton Woods. I can say exactly where I was: A bus station in Afula, Israel buying ice cream in dollars and the price rose as it was the day after the announcement. The proprietor told us prices increased because the dollar bought less. I truly had no idea but just remember that it happened in real time and proved not to be a transitory event. Much is being written about the anniversary and the implications for the global economy.T he Nixon strategy was summed up in his supposed statement of “We ARE ALL KEYNESIAN’S NOW.”
Notes From Underground: Bye Bye, Jerome Powell
August 8, 2021Early last week Senator Elizabeth Warren made her case against Chair Jerome Powell. In a Financial Times article, the senator blasted Powell for his light regulatory touch while praising the efforts of Governor Lael Brainard. Yet many believe Powell is a shoe-in to be reappointed Fed Chair (as much as an 85% chance at some sites).
Notes From Underground: The Fed As G-30 Proxy?
August 1, 2021Last week’s FOMC meeting went as expected but the press conference actually provided some solid questions as the media put some pressure on Chair Jerome Powell. NPR actually received an answer to what TRANSITORY means to the Fed chair: Prices will stay but the process of inflation will stop or slow dramatically. Hmm, the continued use of the LUMBER and AUTO markets did not reflect that definition at all. It seemed that the authorities were pursuing the concept of roll back.
Notes From Underground: From Tweets to Tweaks
June 20, 2021Happy father’s day to all who are one and have had one. Just nine months ago the markets were experiencing convulsions as the then-U.S. president would unleash tweet after tweet at all hours. We certainly don’t miss the key-word-driven algos creating volatility with the tip of their finger. The markets got a jolt last Wednesday when the Fed tweaked its administered rates — interest on excess reserves and the offering yield on its reverse repo facility — by 5 basis points in an effort to prevent short-term rates such as TREASURY BILLS from pushing into negative territory on a SUSTAINED basis as cash continues to flood the market, a consequence of the central bank’s ongoing QE ($120 billion a month). Adding to the deluge is the U.S. TREASURY, which has been running down its cash balance from an all-time high of $1.8 trillion.
Notes From Underground: Sanctions Are Sanctimonious
May 2, 2021In today’s world of DOLLAR domination it is easy for the U.S. Treasury — under the guidance of the president — to place sanctions on many different global actors as they strive to use the conduit of SWIFT and other banking facilities to move money around the globe. The U.S. likes to beat its chest and proclaim that it is operating in a rules-based system and therefore sanctions are an appropriate tool in response to the malevolent actions of autocratic-oriented nationalistic actors. But whose rules? And the invocation of sanctions leads to those subject to the whims of U.S. policy to find ways to operate in international grey areas of commerce.
Notes From Underground: Bonds Talking Trash To the Central Banks
February 28, 2021Last week the world’s bond markets experienced an assault propagated by the MISERABLE U.S. five-year Treasury note auction on Wednesday followed by a more dismal seven-year sale on Thursday. Also, the Australian and KIWI 10-year notes suffered massive bouts of volatility even as the RBA and RBNZ intervened with more QE to stem the rise on the long end. We at Notes From Underground have warned that the markets were attacking the FORWARD GUIDANCE motivations of the world’s monetary authorities by attacking the long end of the yield curve as the area of least resistance because central bank asset purchases around the world have been targeted at debt instruments of much shorter duration.
Notes From Underground: Was It the Fool On the Hill?
February 23, 2021On Tuesday, Federal Reserve Chairman Jerome Powell testified before the Senate Finance Committee in the semi-annual Humphrey-Hawkins Testimony and Report to Congress, in which the Fed has to answer as to how the U.S. economy is performing in relation to its dual mandate. Senator Sherrod Brown, the chair of the finance committee, is very knowledgeable and in similar fashion provided strong leadership but unfortunately he cannot censor stupid questions as politicians use the microphone for political posturing. There were many types of “when did you stop beating your wife” questions as if the Senators wished to trap Powell instead of an honest assessment.
Notes From Underground: Extra! Extra! Read All About It
February 11, 2021On 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%.