Questioning the “Bonds are Cheap” Narrative in Pictures

Introduction: We’ve noted in the past that many market participants are eagerly waiting for the “Fed pivot”; the time when they expect the Federal Reserve will reassure investors that it’s done raising rates and can get back to more of the fun zero-interest rate combined with trillions of dollars of quantitative easing.  Of course that … Read more

We Were Very Close to a Disaster Yesterday – Here’s Why:

Introduction: Tuesday evening, futures markets traded down on news that Apple was seeing lower than expected demand for the new iPhone.  On Wednesday, the markets rallied with the S&P 500 up 2.0% and the NASDAQ up 2.1%.  The reason was the Bank of England announced they would buy long-dated UK treasury securities.  The BoE made … Read more

Another Big Fed Rate Hike

As “expected” the Federal Reserve raised the fed funds rate by another 75 basis points (.75%) today.  We put “expected” in quotation marks because when we started writing about inflation ten months ago, the big Wall Street firms thought we’d get a total of 75 basis points of rate hikes for all of 2022.  We … Read more

Inflation Comes in Hot Again – and Still Understated – 8.3%

The August Consumer Price Index (CPI) just came in at 8.3% (prices up .1% from last month).  Market watchers were expecting a CPI of 8.1% and prices down .1% from July.  Whether the report showed 8.1% or 8.3%, it’s a huge number.  To give you a sense of how bad 8% inflation is, at that … Read more

A Market Run By Press Conferences

Introduction: We’ve noted two related market trends over the past few months.  The first is bad economic news is good for the market.  That’s because the Fed is more likely to slow rate hikes into a weaker economy.  Click the link for a more detailed description.  The second is the market has been trading based … Read more