Federal Reserve/Monetary Policy

Federal Reserve’s Own Inflation Expectations Surveys More Agree w/Euro$ Futures Inversion Than Rate Hikes

By Jeffrey P. Snider|2022-02-14T19:14:27-05:00February 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC is going to hike rates maybe even aggressively. There’s not much dispute on this assumption. Why the Committee might be doing so, that’s a whole detailed debate. The Treasury yield curve is building toward inversion while the crucial (and leading) Euro$ futures curve is already substantially upside down.Both are increasingly confident market bets against the FOMC’s position(s).Jay Powell [...]

Major Euro$ Curve Developments (also not clickbait)

By Jeffrey P. Snider|2022-02-14T17:47:17-05:00February 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I’ve said since it first showed up on December 1 to keep the eurodollar futures curve in the back of your mind. It wasn’t likely to change all that much in its first stage of minor inversion. The mere fact it had gone upside down at all regardless of where on the curve or by how much was already a [...]

Transmission of (euro)Dollar Disease Back Through Beijing To The Rest Of The World

By Jeffrey P. Snider|2022-02-11T19:43:23-05:00February 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everyone was really confused. China was the unstoppable monster, the economic powerhouse that had quite easily, it seemed, survived the Great “Recession” with barely a scratch. Its ascent to the dominant world position had been written long ago in stone, carved macro graffiti left in place especially as the so-called developed world struggled mightily after 2009.The Chinese were widely thought [...]

Setting Up To Repeat The Policy-Error Error

By Jeffrey P. Snider|2022-02-11T17:58:58-05:00February 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The way it was told, the US and worldwide economy in 2017 and for most of 2018 was absolutely on fire. Booming. They even came up with a name for it, calling the period “globally synchronized growth.” This was so good it was, everyone claimed, in danger of becoming too good. Inflation.To stay ahead of that monster, to keep the [...]

Sky High CPI and the Surging Conflict of Interest (rates)

By Jeffrey P. Snider|2022-02-11T13:25:50-05:00February 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

NOTE: This post was written on Thursday, February 10. This isn’t typical. Both the speed at which this has come about and the depth to which the it has now sunk, the yield curve’s wild flattening is simply breathtaking. Today’s accelerating CPI print accelerated the distortions all over the Treasury market such that it has taken a shape along key [...]

China’s Total Dollar Equation: CNY minus Trade Flows equals Some Sense of the Euro$ Problem?

By Jeffrey P. Snider|2022-02-09T19:13:51-05:00February 9th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In the earliest days of the eurodollar, its purpose was primarily as a global reserve medium to intermediate and finance trade. To surmount Triffin’s Paradox, this ledger system arose as demand for the reserve currency outstripped the Bretton Woods arrangement’s ability to supply it (because it was constrained by US gold reserves). Rebuilding first from WWII and then an explosion [...]

Rate Hikes and ‘Inflation’ Sizzle, But Where’s QE’s Beef?

By Jeffrey P. Snider|2022-02-07T19:43:15-05:00February 7th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As a follow-up to the post-October correlation in Treasuries, it’s worth reiterating how much more compelling the flattening curve has been given the full range of circumstances otherwise all lined up directly opposed to it. There has been: 1. Accelerating CPI.2. Higher oil prices.3. Looming rate hikes.4. Outwardly favorable labor data turbocharging expectations for even more aggressive rate hikes (and [...]

From Container Prices To Inflation Expectations And The Yield Curve, They All Dwell On October

By Jeffrey P. Snider|2022-02-07T18:44:00-05:00February 7th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This thing, this massive supply disruption is a perfect example of a positive feedback loop. It began with government (over)reaction to COVID, as noted here impacting both supply and demand. Those two curves have behaved in classic fashion, inelastic supply unable to efficiently respond to an artificial outward shift in demand. The resulting impact price-wise as pure economics (small “e”).A [...]

Payrolls and Population, What A Mess

By Jeffrey P. Snider|2022-02-04T15:02:37-05:00February 4th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What a time to forget it was the month for yearly benchmark revisions. After making a huge deal out of these spread across all kinds of economic accounts put together by various government agencies, I hadn’t remembered how February each year the BLS makes its contributions to correcting economic records for the payroll and employment data. So, I wrote this [...]

Europe’s Inflation Situation, Where Germany’s 10s Are and Why

By Jeffrey P. Snider|2022-02-03T20:28:56-05:00February 3rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

All eyes on Europe today where ECB Governor Christine Lagarde tried very hard to avoid committing to either rate hikes or the timing of them. Always conditional, she says. However, everyone knows different. With her counterparts at the Federal Reserve already committed to panicking over CPI rates, the latest HICP inflation numbers in Europe are not going to take any [...]

Stay In Touch

Contact