Tag Archives: Monetary Policy

Debate Within The FOMC: Bubblistas v. Efficient Marketistas?

We have finally made the time to more closely review the release of last week’s Fed minutes from the July 25-26 meeting.   We kind of like what we see. Debate Breaking Out Among FOMC Members? A debate appears to breaking … Continue reading

Posted in Equities, Interest Rates, Monetary Policy, Uncategorized | Tagged , , , , | 8 Comments

COTD: “Easy Financial Conditions”

You heard it here first, folks, in our July 16th post,  Market Liquidity Conditions Still Loose As A Goose. Here is Bloomberg on the easy money, Easier financial conditions affect the Fed in three ways. First, officials will associate them with … Continue reading

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This Rhyme Is Different: Base Money > M1

“History doesn’t repeat itself but it often rhymes.” –  Mark Twain (maybe) We have been speaking a lot about how the liquidity in the market today is different than in the past.   The chart below reflects this better than … Continue reading

Posted in Economics | Tagged , , , | 16 Comments

Did Janet Yellen Hear Us?

In our piece, Reflexivity And Why The Fed Must Sell The Long End, posted on June 13th,  we warned of the dangers of a flattening yield curve based on distorted interest rates due to QE. ..some still look to the badly distorted bond … Continue reading

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Market Liquidity Conditions Still Loose As A Goose

Since the Fed began raising interest rates in December 2015,  financial market liquidity conditions have loosened considerably.   Recall our post,  Orwellian Monetary Policy,  which we wrote in May. “Tightening is Easing” Since U.S. monetary policy began tightening in December … Continue reading

Posted in Algos, Monetary Policy, Uncategorized | Tagged , , | 17 Comments

Gary Cohn As Next Fed Chairman?

Politico out with a piece tonight citing souces that National Economic Council Director and Goldman alum, Gary Cohn, is the leading contender to replace Janet Yellen next January.    Interesting timing as it comes on the eve of Janet Yellen’s two-day … Continue reading

Posted in Interest Rates, Monetary Policy, Uncategorized | Tagged , , , | 9 Comments

Reflexivity And Why The Fed Must Sell The Long End

The yield curve is flattening like a pancake.   Tightening cycles tend to do that. Furthermore, the effective float of 10-year and longer U.S. notes and bonds is relatively small and greatly distorts the bond market signal.   We have written … Continue reading

Posted in Bonds, Economics, Monetary Policy, Uncategorized | Tagged , , | 31 Comments

The Fed’s Overnight Reverse Repurchase Agreements

Interesting piece on Barry Ritholz’  Big Picture blog yesterday,  Implementing Monetary Policy: Perspective from the Open Market Trading Desk.    An excellent follow-up to our last week’s post, Orwellian Monetary Policy. Recall we noted the structural change in monetary policy and … Continue reading

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Fed Ownership of Yield Curve and Balance Sheet Reduction

Here you have it, folks, a one stop chart. The chart below shows the total outstandings of Treasury bonds and notes,  the Fed ownership of the total maturities and percentage of outstandings in each year of maturity (note, the data … Continue reading

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The Broken Bond Market

The Fed tightens on Wednesday and bonds rally.  What the hay? GaveKal, Jeff Gundlach,  and Jim Bianco nailed it in that every spec and their mother are/were short 10-year Treasuries. Source: Quandl (see here for interactive chart) But this is … Continue reading

Posted in Bonds, Monetary Policy, Sovereign Debt, Sovereign Risk | Tagged , , , , , | 51 Comments