Making the rounds on Twitter yesterday (h/t to M. Simmons) was a quote attributed to Minneapolis Fed President Neel Kashkari. I can’t find any confirmation for it so it could be one of those fake news tweet situations. And the only reason I include it here is because it sounds like something he would say; the urge to pile on [...]
As you might imagine, inflation was the hot topic of conversation during the December 2014 FOMC meeting. Having opened up the transcripts for that year to the public last month, we are once more treated to the background behind this theater of the absurd. The final few months of 2014 were when everything came together. For these central bankers, it [...]
On January 14, FRBNY announced that it would continue offering its short-term liquidity operations for another month, until at least February 13. In setting the scene in order to slowly wean primary dealers from its non-repo repo program, the New York branch also declared that at its term repo window the cap would be reduced from $35 billion to $30 [...]
According to analysts and economists who watch these things, Germany’s IFO Business Climate Index was expected to continue its rise. Having purportedly bottomed out back in September, like other sentiment indicators this one had been on the rebound, too, if, though, much less than those others (especially the “stimulus” loving ZEW). While maybe not suggesting the turnaround we had been [...]
The Federal Reserve has indicated that it will now pause – for a second time, supposedly. Remember the first: after raising its benchmark rates apparatus in December while still talking about an inflationary growth acceleration requiring still more hikes, in a matter of weeks that was transformed into a temporary suspension of them. Expecting the easy disappearance of “transitory” factors, [...]
While things go wrong for Jay Powell in repo, they are going right in housing. Sort of. It’s more than cliché that the real estate sector is interest rate sensitive. It surely is, and much of the Fed’s monetary policy figuratively banks on it. When policymakers talk about interest rate stimulus, they largely mean the mortgage space. Homebuilders, at least, [...]
They remain just as confused as Richard Fisher once was. Back in ’13 while QE3 was still relatively young and QE4 (yes, there were four) practically brand new, the former President of the Dallas Fed worried all those bank reserves had amounted to nothing more than a monetary head fake. In 2011, Ben Bernanke had admitted basically the same thing. [...]
Europe’s QE, as noted this weekend, is off to a very rough start. In the bond market and in inflation expectations, the much-ballyhooed relaunch of “accommodation” is conspicuously absent. There was a minor back up in yields between when the ECB signaled its intentions back in August and the few weeks immediately following the actual announcement. Other than that, and [...]
For the second time this week, the ISM managed to burst the bond bear bubble about there being a bond bubble. Who in their right mind would buy especially UST’s at such low yields when the fiscal situation is already a nightmare and becoming more so? Some will even reference falling bid-to-cover ratios which supposedly suggests an increasing dearth of [...]
With China closed for its National Day Golden Week holiday, the stage was set for Japan to steal the market spotlight. If only briefly. The Bank of Japan announced last night that it had had enough of the JGB curve. The 2s10s very nearly inverted last month and BoJ officials released preliminary plans to steepen it back out. Japan’s central [...]
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