Newsclips
Expect a VERY Aggressive Fed
April 22, 2022
"Hike to something breaks" is now the Fed's unofficial policy. This could mean a plunging stock market/economy or runaway inflation. But the Fed is not stopping until something breaks.
"Hike to something breaks" is now the Fed's unofficial policy. This could mean a plunging stock market/economy or runaway inflation. But the Fed is not stopping until something breaks.
Today's topics include reasons to worry about inflation, reasons not to worry about inflation, an eye on the yuan & capital outflows from China, the growth of central banks' balance sheets, quantifying the effect of an EU gas embargo, quantifying the economic effect of China's lockdown, the world's reliance on wheat, the case for continued global supply chains, and an update on Russian oligarchs
Will the Fed have to actively sell notes and bonds to reduce the Treasury portion of their balance sheet by $60 billion per month? Some rough math suggests they have time on their side.
Investment grade and high yield bonds trade like an index thanks to the evolution of ETFs. In particular, ETF trading is accounting for a larger portion of cash market volume.
Stablecoins continue to be a hot topic of debate as Tether (USDT) and Circle (USDC) dominate market share. These coins are centralized and are redeemable for $1.00 because they are backed by cash and cash equivalents, essentially money market instruments.
A look at the latest infection counts around the world
The market currently expects seven hikes by the end of 2022, with 100 basis points worth of hikes expected in the next three meetings.
An update of the world of negative-yielding debt
A long-term look at retail gas prices
Some interesting charts from our recent posts
Today's topics include 50 basis point hike almost a certainty at May meeting, should the Fed review its policy framework?, where have all the bulls gone?, measuring Russia's oil shock with satellite images, the technicalities of Russian default, wage inflation, countries diversifying away from the dollar, a weak yen means higher import costs for Japan, European power prices continue rising, and Goldman shows interest in crypto exchange FTX