Posts Tagged ‘yield curve control’
April 24, 2023
I have a hypothesis of major significance:
As the markets have seesawed for the past six weeks one asset has been consistent: the EUR/YEN cross. The SVB fallout coupled with concern about savings fleeing from other regional and community banks has subsided, allowing for the global equity markets to slough off concerns over undue leveraged risks causing further pain for investors. The Credit Suisse writedown on AT1 bonds — contingent convertibles or COCOS — has dissipated sending the EURO and SWISS currencies to recent highs against the DOLLAR, and, more importantly, versus the YEN.
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Tags:Bank of Japan, euro/yen cross, Federal Reserve, Japanese yen, Kazuo Ueda, YCC, yield curve control
Posted in BoJ, Central Banks, ECB, Fed | 6 Comments »
September 2, 2021
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.
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Tags:Bill Gross, central banks, Federal Reserve, FOMC, inflation, Jerome Powell, nonfarm payrolls, QE, U.S. Dollar, yield curve control
Posted in Debt Market, Fed | 14 Comments »
May 16, 2021
I pose this question as a challenge to all of those traders and investors, and a call to action. There is so much discussion about the onset of inflation but do the inflationists have the fortitude to attack the FED where it hurts: the long end of the yield curve? The primary focus of the FED has been on the part of the QE purchases has been the shorter end as 80% of the FED‘s balance sheet is five years or less. If the inflation concern is of the magnitude suggested by the mainstream media then market participants OUGHT to be selling the longer duration Treasuries because as we know the Wall Street mantra is DON’T FIGHT THE FED.
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Tags:Chinese Yuan, Commodities, Federal Reserve, FOMC, inflation, Jerome Powell, Stanley Druckenmiller, Treasury curve, yield curve control
Posted in Commodities, Fed, Inflation, United States | 43 Comments »
May 10, 2021
In 1976, when I was beginning my long march toward acquiring knowledge to analyze markets Gerald Ford was running for reelection. Inflation was gaining strength so the FORD campaign was bent on making America believe that he had the fortitude to break the inflation spiral threatening the Middle Class. Campaign buttons said W.I.N. (whip inflation now). Getting inflation under control was seen as the paramount issue.
When I was wandering through a flea market in New York in 2007, I found an original WIN button that I bought for $1.25. See? Paul Volcker did whip inflation. (I gave the button to the best financial plumber, James Aitken, as a token of appreciation for all the knowledge he imbued in me about the plumbing of the short-term funding markets.)
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Tags:Federal Reserve, inflation, Janet Yellen, Jerome Powell, W.I.N., yield curve control
Posted in Fed, United States | 46 Comments »
February 28, 2021
Last 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.
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Tags:central banks, forward guidance, Treasury auctions, U.S. Dollar, U.S. Treasury Market, yield curve control
Posted in Central Banks, Debt Market, United States | 74 Comments »
February 23, 2021
On 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.
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Tags:Chinese Yuan, Federal Reserve, Humphrey Hawkins, inflation, Jerome Powell, kiwi dollar, QE, RBNZ, U.S. Dollar, yield curve control
Posted in China, Currency, Fed, RBNZ | 16 Comments »
February 21, 2021
Forward guidance is a key tool in the Federal Reserve’s arsenal, promoted in a speech long ago by Columbia University professor Michael Woodford at the Jackson Hole Symposium. In a previous communication, the central bank said, “Forward guidance is a tool that central banks use to provide communication to the public about the likely course of monetary policy.”
This tool allows the FED to establish a time-directed path for interest rates so that the MARKET does not suffer shocks from an upward surprise move in rates.
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Tags:Axel Weber, Federal Reserve, forward guidance, inflation, U.S. Treasuries, U.S. yield curves, yield curve control
Posted in Debt Market, Fed | 17 Comments »
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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Tags:BTP, EU, Federal Reserve, FOMC, Italy, Jerome Powell, Mario Draghi, U.S. Dollar, U.S. Treasury Market, yield curve control
Posted in Debt Market, Europe, Fed | 13 Comments »