fomc

‘Can’t Figure You Out’

By |2015-06-02T16:53:41-04:00June 2nd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The unifying element of the prospect for recession in 2015 is how it will reveal the hugely mistaken assumptions that were taken on faith alone. Entering 2008, for example, the FOMC kept some plausibility because of the housing debacle. A convenient scapegoat, the Fed proclaimed that recession was a danger on housing alone, and so its mistakes were met as [...]

Yellen Puts The ‘Dollar’ Back On Suicide Watch

By |2015-05-22T15:07:33-04:00May 22nd, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Volatility in UST trading declined a bit in the past few days, as treasury yields became far more settled intraday. While that breaks the exact duplication Monday and Tuesday this week traced from Monday and Tuesday last week, the past two weeks overall remain remarkably similar. And for all the noise, the ups and downs along the way, treasury yields [...]

The Definitive Monetary Policy Statement

By |2015-05-20T17:14:26-04:00May 20th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

To preserve any idea that the US is not heading into recession, the FOMC is now wholly reliant on statistical processes within the BEA’s use of the Census Bureau’s updated ARIMA-X13 modeling system. It is amazing to see this policy body that once proclaimed, unequivocally and forcefully, that it could perform the monetary equivalent of sorcery and alchemy reduced to [...]

‘Dollar’ Change Starting In March May Be Just Buying Time

By |2015-05-19T12:09:40-04:00May 19th, 2015|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Given the dramatic inflection in “dollar” behavior surrounding the March 18 FOMC meeting there wasn’t much surprising in the latest TIC figures for that month. If anything was complicated it was due solely to the fact that this change occurred mid-month. For the most part, the heavy “tightening” trend that began anew after January was reset by the end of [...]

Are Funding Markets Preparing For the Next QE?

By |2015-05-05T16:34:33-04:00May 5th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As the “dollar” has taken back some of its pressure we are seeing at least some of the effects of that in various credit and funding markets. There can be no doubt now that the March 18, 2015, FOMC decision to at least position more “dovish” removed a great deal of “dollar” stress from the global network. To that end, [...]

‘Dollar’ Coming Back Into Focus

By |2015-04-29T16:37:00-04:00April 29th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC statement changes seem to have initiated knee-jerk reactions undoing the interpretations of the March statement. In other words, the first blush of FOMC obfuscation appears to be trending back toward “hawkishness” in clear defiance of last month’s clear “dovishness.” The basis for that seems to be the references to what the Fed is still proclaiming “transitory” factors, to [...]

Dead Money US$; The OIS Disappearance

By |2015-04-28T17:06:16-04:00April 28th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

In taking the lessons of OIS in 2007-08 to analysis, the immediate approach would be for skepticism about OIS in isolation right from the start. To that end, LIBOR-OIS suggests absolutely nothing out of the ordinary by itself. That is particularly odd since we know without any doubt that there have been severe liquidity problems at numerous points since QE3 [...]

Dead Money US$; The OIS Transformation

By |2015-04-28T16:55:27-04:00April 28th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

In looking last week at some stress mechanics of the interbank markets I intentionally left out one piece, the Overnight Index Swap. OIS is often viewed as another measure of liquidity risk, keyed off matched maturity LIBOR, to give us a sense of order and good function. There is an OIS rate for every major currency regime, predicated and cued to [...]

Relevant Decomposing Spreads of Spreads

By |2015-04-27T17:34:20-04:00April 27th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

This post is actually a companion to the last, looking into the discrepancy of breakevens with the broader credit market, but I felt it deserved attention all its own. As noted in that prior discussion, there is little indication that credit markets are at all re-evaluating prospects for “inflation” and recovery. If anything, they remain curiously stubborn against it even if [...]

Inflation Expectations Have Little To Do With Inflation

By |2015-04-27T16:20:41-04:00April 27th, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets|

If we have learned anything from this period in economic and financial history, it should have been to take great care when using or expecting past correlations as valid. There are innumerable examples where that dynamic shift applies, but it seems especially relevant at the end of April 2015. The amount of space and pixels dedicated to the idea that [...]

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