Why Powell was great, and my story of meeting him
Federal Reserve Chair Jerome Powell’s last press conference is today and his chair term ends in a couple of weeks. He will be sorely missed as chair, no matter if he stays on as Governor or not. I think he was great. His greatness was…
3-yr rate call performance
This writing presents the value of my interest rate calls back to November of 2022 (3.2 years ago) where I first advocated owning US Treasury duration in anticipation of rates falling in the ongoing, but slowly evolving, downside of this business cycle (note: I define…
Skeptical of Truflation’s disinflation
Truflation is a newer private real-time statistic of inflation that comes out each day (similar to the LDEI) with more granularity to see trends changing faster, be more timely, and fill-in when official data is absent (like last year’s government shutdown). Since its inception in…
The Fed moves to neutral with an upbeat forecast
In my piece before the Fed meeting, I expected the Fed/Powell to acknowledge economic improvement with short-term yields rising. I got half of that right. The Fed acknowledged economic improvement in the statement and press conference, but not to a degree that moved interest rates….
Economic improvement awaits Powell’s ratification
The Fed will announce the results from its two-day meeting tomorrow. As is widely accepted, they won’t change the Fed Funds rate, but I expect Jerome Powell to begin acknowledging economic strength in the press conference, which he has yet to do. Much of the…
FOMC meeting was ultimately hawkish
The first thing to mention is that I was wrong about the Fed being paused after the last meeting, they cut another 0.25% yesterday. What I wasn’t wrong about is the trajectory of the economy and Fed as it gets progressively better and more hawkish…
After two cuts, the Fed is back to paused
Yesterday’s FOMC meeting was a meaningful pivot that I suspect will result in significantly higher Treasury yields (particularly at the front-end/belly of the curve) over time to price-out the cutting that has been priced in, not unlike the end of last year. For a fifth…
Post FOMC meeting comments
Yesterday’s FOMC meeting was a combination of dovish and hawkish elements, but overall, the meeting was more dovish than I expected because Jerome Powell sounded dovish in the press conference. Nevertheless, Treasury yields rose as I expected (about 6bps) and I continue to think they…
Special Report: Doves Are Ignoring a Lot
The bond market is priced for six FOMC cuts to begin tomorrow, predicated on low payrolls and Jerome Powell’s Jackson Hole speech, both of which are misunderstood. It’s too many. Five points to show it with negative implications for bond and stock markets. [PDF]
The Fed isn’t as dovish as markets think
Three things have come together (somehow it is always three that make people feel certain) to give the impression that a September rate cut is a done deal; priced at an 88% chance in the Fed funds futures market. They are the weak July jobs…