Today's topics include the 'everything but bonds' rally, everything hinges on your estimate of neutral, betting on rate cuts, will the Fed focus on jobs over inflation?, sizing up the Treasury market, banks' interest income, record corporate bond inflows, the short vol trade, and bitcoin ETF outflows
The implementation of monetary policy is based on assumptions. We argue the shutdown/restart of the economy in 2020 changed things. Since assumptions are inherently based on the economic environment, using pre-pandemic assumptions in a new cycle will result in a skewed perspective.
Today's topics include central banks might be out of sync, when politics influences economics, dollar gains if market is wrong about Fed cuts, playing musical chairs with bad CRE loans will end poorly, mortgage rates can stay higher for longer than most anticipate, no cuts camp gets louder, European stocks outperforming expectations, strong demand for credit keeps spreads tight, and Bitcoin momentum dies out
A look at outstanding amounts of Treasuries, corporates, agencies, munis and open market paper
The amount of outstanding private credit in the U.S. experienced a brief decline during the financial crisis, but government debt grew throughout the entire period.
Private pension funds typically have much smaller funding gaps than their government counterparts.
Defined benefit plans continue to be replaced by IRAs and defined contribution plans.
Over the past couple decades, households' real estate equity and direct stock ownership have moved in lockstep.
Personal consumption continues to make up a larger portion of U.S. GDP as time progresses.
Roughly 39% of FDIC deposits in the U.S. are uninsured.