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

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

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

Who’s Going to Pay for the Losses at the Fed?

We’ve pointed out more times than we can count that the Federal Reserve currently has around $9 trillion dollars of securities on its balance sheet.  This includes trillions of dollars of mortgage securities its not allowed to own.  The main reason that inflation has been so high this year has been the Fed’s increase of … Read more

Down Goes the Petrodollar

We have warned, and warned and warned that the design of the anti-Russian sanctions are impairing the value of the dollar as the world’s reserve currency.  In particular, we have been concerned about the status of the petrodollar.  The US made a deal with Saudi Arabia in the 1970s where in exchange for the US … Read more