Weekly Market Pulse (VIDEO)
Alhambra CEO Joe Calhoun describes the move in bonds last week, what it means, and how it's different than a similar move in the spring of 2021.
An Anti-Inflation Trio From Three Years Ago
Do the similarities outweigh the differences? We better hope not. There is a lot about 2021 that is shaping up in the same way as 2018 had (with a splash of 2013 thrown in for disgust). Guaranteed inflation, interest rates have nowhere to go but up, and a certified rocking recovery restoring worldwide potential. So said all in the media, [...]
What *Seems* Inflation Now Is Something Else Entirely
This is yet another one of those crucial recent developments which should contribute much clarity about the economic situation, yet is exploited in other ways (political) adding only more to the general state of economic confusion. The shelves may be empty in a lot of places around the country, leaving anyone with the impression there just aren’t enough goods. Shortage [...]
Weekly Market Pulse: Inflation Scare!
The S&P 500 and Dow Jones Industrial stock averages made new all-time highs last week as bonds sold off, the 10-year Treasury note yield briefly breaking above 1.7% before a pretty good-sized rally Friday brought the yield back to 1.65%. And thus we're right back where we were at the end of March when the 10-year yield hit its high [...]
The ‘Maestro’ Is Why Jay Powell Keeps Seeing (inflation) Ghosts
See, this is backward. And while it may seem overly pedantic, getting it right is actually a crucial insight (lack thereof) into pretty much everything. Its purpose is to maintain a different sort of money illusion (the original relates to how workers focus on nominal rather than real levels of compensation). This other money illusion relates to the hidden nature [...]
Do Bonds Accurately Price Inflation? Since Before Any of Us Were Born
Many, likely the vast majority believe that the recent wave of consumer price increases is going to stick around. It’s already painful and even if it isn’t inflation, they’re thinking, it soon will be. Maybe not 1970’s bad, not yet, at the very least something like then.The bond market doesn’t just disagree, it keeps doing so vehemently. Nothing new, bond [...]
You Don’t Have To Take My Word For It About Eliminating QE
You don’t have to take my word for it. QE doesn’t work and it never has. That’s not just my assessment, pull out any chart of interest rates for wherever gets the misfortune of having been wasted with one of these LSAP’s. If none handy, then just read what officials and central bankers write about their own programs (or those [...]
While The Fed Chases The Unemployment Rate, TIC’s Eurodollar Deflation Case Is Unusually Unambiguous
The Chinese yuan had traded in a curiously narrow range ever since mid-June. Stuck, it seemed, between 6.50 at the bottom and around 6.45 ceiling, the lack of movement in either direction raised suspicions of concerted official effort. China’s officials, obviously, certainly not those from the Federal Reserve who spend all their time scouring drug reports and benefits cliffs so [...]
Retracing The Yield Gap For The Unemployment Rate Isn’t The Same Thing
Thomas Barkin is President and CEO of the Federal Reserve’s Fifth District branch headquartered in Richmond. Beginning the job during the tumultuous and confusing 2018 (for those wherever at the Fed), Barkin in 2021 is and has been a voting FOMC member. Whether he is judged a “hawk”, “dove”, or some other kind of feathering maniac I’d leave to the [...]
The Curve Is Missing Something Big
What would it look like if the Treasury market was forced into a cross between 2013 and 2018? I think it might be something like late 2021. Before getting to that, however, we have to get through the business of decoding the yield curve since Economics and the financial media have done such a thorough job of getting it entirely [...]
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