Category Archive: 5) Global Macro

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Weekly Market Pulse: What Now?

2022-04-05

The yield curve inverted last week. Well, the part everyone watches, the 10 year/2 year Treasury yield spread, inverted, closing the week a solid 7 basis points in the negative. The difference between the 10 year and 2 year Treasury yields is not the yield curve though. The 10/2 spread is one point on the Treasury yield curve which is positively sloped from 1 month to 3 years, negatively sloped from 3 years to 10 years and positively sloped again...

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The Short, Sweet Income Case For Ugly Inversion(s), Too

2022-04-04

by Jeffrey P. Snider

2022-04-04

A nod to just how backward and upside down the world is now. The economic data everyone is made to pay attention to, payrolls, that one is, in my view, irrelevant. As is the consumer price estimates from earlier this week, the PCE Deflator. That’s another one which receives vast amounts of interest even though it is already old news.

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Weekly Market Pulse: The Cure For High Prices

2022-03-31

by Joseph Y. Calhoun

2022-03-31

There’s an old Wall Street maxim that the cure for high commodity prices is high commodity prices. As prices rise two things will generally limit the scope of the increase. Demand will wane as consumers just use less or find substitutes. Supply will also increase as the companies that extract these raw materials open new mines, grow more crops or drill new wells.

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We Can Only Hope For Another (bond) Massacre

2022-03-30

by Jeffrey P. Snider

2022-03-30

To begin with, the economy today is absolutely nothing like it had been almost thirty years ago. That fact in and of itself should end the discussion right here. However, comparisons will be made and it does no harm to review them.I’m talking about 1994, or, more specifically, the eleven months between late February 1994 and early February 1995.

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It Wouldn’t Be TIC Without So Much Other

2022-03-23

by Jeffrey P. Snider

2022-03-23

With the Fed (sadly) taking center stage last week, and market rejections of its rate hikes at the forefront, lost in the drama was January 2022 TIC. Understandable, given all its misunderstood numbers are two months behind at their release. There were some interesting developments regardless, and a couple of longer run parts that deserve some attention.

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Inversion Is The Real March Madness, Just Don’t Take It Literally

2022-03-22

by Jeffrey P. Snider

2022-03-22

With such low levels of self-awareness, it isn’t surprising that the FOMC’s members continue to pour gasoline on the already-blazing curve fire. March Madness is supposed to be on the courts of college basketball, instead it is playing out more vividly across all financial markets.

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The Fed Inadvertently Adds To Our Ironclad Collateral Case Which Does Seem To Have Already Included A ‘Collateral Day’ (or days)

2022-03-21

by Jeffrey P. Snider

2022-03-21

The Federal Reserve didn’t just raise the range for its federal funds target by 25 bps, upper and lower bounds, it also added the same to its twin policy tools which the “central bank” says are crucial to maintaining order in money markets thereby keeping federal funds inside the band where it is supposed to be. The FOMC voted to increase IOER from 15 bps to 40 bps, and the RRP from 5 bps to 30 bps.

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Media Attention All Over FOMC, Market Attention Totally Elsewhere

2022-03-19

by Jeffrey P. Snider

2022-03-19

The Federal Reserve did something today, or actually announced today that it will do something as of tomorrow. And since we’re all conditioned to believe this is the biggest thing ever, I’ll have to add my own $0.02 (in eurodollars, of course, can’t be bank reserves) frustratingly contributing to the very ritual I’m committed to seeing end.We shouldn’t care much about the Fed.

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