The Fed is poised to hike Interest on Excess Reserves (IOER) by five basis points today in an attempt to keep the effective funds rate near the mid-point of its targeted range between 1.50% and 1.75%.
Today's topics include the January barometer, the market impact of coronavirus, China's new interest rate policy tools, Dudley says T-bill purchases not driving stocks higher, QE Lite, the CBO's latest deficit forecasts, crude oil demand shocks, and the debt habits of Gen Z vs. millennials.
The growth in coronavirus infections has continued along a geometric progression for the last 12 days. While not overlooking the human tragedy, the markets have the difficult task of pricing an event that has a small chance of being devastating to global growth, but a more likely outcome of being contained.
Bernie Sanders is leading the betting markets and polling for Iowa (February 3) and New Hampshire (February 11). He also is polling at his highest levels ever for the overall nomination, but still trails Biden. The betting markets expect Sanders to win the first three contests, which is why bettors now think he is the favorite for the nomination.
Today's topics include the Fed's battle to control the funds rate and its balance sheet, the market's reaction to coronavirus, measuring productivity and inflation, there is no alternative, inflation complacency, the Fed's inflation strategy, hedge fund outflows and Tesla.
Roughly one-third of S&P 500 companies will report Q4 2019 earnings this week. Will the reports show indications that earnings will rebound by Q4 2020?
Today's topics include DoubleLine's Round Table Prime, junk bond duration, negative-yielding debt grows, the Fed's balance sheet and stocks, have the markets outrun the economy?, transport stocks trail, big bank take little bank, reviewing the Fed's toolbox, the cost of high frequency trading and inflation targeting.
On January 23, 2020, Jim spoke to the Chicago chapter of the CMT Association. Below is the slide deck from the speech: View PDF
Today's topics include the new 20-year bond's effect on the Treasury's average maturity, foreign banks operating in China, the ECB's policy review, the effect of zero commission trades, reaching for yield, MSCI takes a stake in private equity database firm and energy's drag on earnings.