The repo story especially as it is told from the TIC perspective is our main emphasis currently. However, there are other odds and ends in the series that deserve some separate attention if not to the same level. The dollar system is more than collateralized lending, and this will include a few items that I’m going to point out for [...]
Why haven’t US Treasury yields exploded higher? Sure, they are, at the long end, up from their lows set in late August when the rate for the 30-year long bond reached all the way down to a new record. The winds of sentiment have shifted, benefited by globally coordinated (not quite synchronized) monetary “stimulus” as well as a healthy dose [...]
While the world tries to digest the latest in geopolitics, as well as guess what could come next with them, on the topic of the economy the TIPS market registered a notable high yesterday. The 5-year breakeven rate, the difference between the “real” yield on the 5-year TIPS and the nominal yield for the 5-year US Treasury Note, was pulled [...]
Yesterday, IHS Markit reported that the manufacturing turnaround its data has been suggesting stalled. After its flash manufacturing PMI had fallen below 50 several times during last summer (only to be revised to slightly above 50 every time the complete survey results were tabulated), beginning in September 2019 the index staged a rebound jumping first to 51.1 in that month. [...]
It’s all somewhat confusing, once acclimated to this new paradigm. The highest in years can still be nearer the lowest in history. Given that apparent contradiction, it seems as if only one of those perspectives can apply. Which one you focus on often depends upon which way you already lean. Toward the end of last year, mortgage interest rates had [...]
Back at the end of April, the FOMC and its dozens of staff members gathered around to talk policy as those people always do every six weeks or so. The agenda was quite full, with Jay Powell having had to switch from rate hikes to a Fed “pause” the few months before and none of them really sure why. Economic [...]
Is the global economy on the mend as everyone at least here in America is now assuming? For anyone else to attempt to answer that question, they might first have to figure out what went wrong in the first place. Most have simply assumed, and continue to assume, it has been fallout from the “trade wars.” That is a demonstrably [...]
According to the latest TIC estimates from the Treasury Department, foreign governments continued their heavy selling of US Treasuries. During the month of October 2019, the most recent data, the official sector disposed of more than $40 billion of those securities on net. It was the third straight month of substantial declines. Some observers try to link this kind of [...]
Just in time for more discussions about repo, the Federal Reserve delivers. Not in terms of the repo market, mind you, despite what you hear bandied about in the financial media the Fed doesn’t actually go there. Its repo operations are more RINO’s – repo in name only. No, what the US central bank actually contributes is more helpful data. [...]
The biggest thing about September’s repo rumble wasn’t the double-digit GC rate(s), it was the timing. Beginning on the Monday the day before the FOMC’s regular policy meeting, Jay Powell couldn’t accomplish what he had set out to. The Fed’s Chairman wanted what was the second rate cut in the series to be a more placid one. A confirmation, of [...]
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