When Powell described the labor market as being in good shape, he was saying it could handle aggressive rate hikes without massive job losses. Will he signal this again and set the stage for a 75 basis point hike in June?... Read More
Long-term debt and equity traders still think the fed funds market has priced in too many hikes. Stock and bond traders initially perceived inflation to be transitory. Now they believe the Fed is on the verge of going too far and breaking something.... Read More
If the Fed does not tighten far enough, they risk a period of longer and higher inflation. If the Fed raises rates at a strong pace, something in the market is likely to break. This is the catch-22 of the year 2022.... Read More
When measured on a total return basis, the bond market is in a historic decline. Yet, futures positioning and economists' opinions are not overly bearish. Momentum-driven research is very bearish and stands in opposition. Add it up and sentiment data is not suggesting a capitulation low in prices has taken place yet.... Read More
"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.... Read More
A look at the latest infection counts around the world... Read More
Inflation is at multi-decade highs, interest rates are rising, and the Fed has signaled they are willing to do anything necessary to bring down inflation. Despite this backdrop, the housing market is as hot as ever. We argue this is not a bubble, but a fundamental shift in demand.... Read More
The market is concerned the Fed has fallen behind on the inflation front, so yields are spiking and bank stocks are falling in kind. The remedy is for the Fed to get serious and start raising rates 50 basis points at every meeting going forward. Yes, this risks the Fed doing too much and breaking something. But this is the consequence of the Fed dismissing inflation as transitory last year and staying way too easy for way too long.... Read More
Jim Bianco joins CNBC?s Closing Bell to discuss Rate Hikes & how the Fed views Earnings Season Jim Bianco: The Bloomberg Global Aggregate Index began in 1990. Its market value is currently $62.8 TRILLION and has over 28,000 member bonds.... Read More
Colleague: 2s10s is 45bps steeper in 7 trading days….that’s gotta be a recent record in move over such a short time frame… Jim Bianco: What is driving this steepening is a big surge in the long-end. When TOTAL RETURN losses... Read More
Quantitative tightening will actively work against financial asset holders, creating a reverse wealth effect that destroys demand.... Read More
Jim Bianco: 81% of a 50 bps hike on May 4 (to 0.75% to 1.00%) 87% of a second 50 bps hike on June 15 (to 1.15% to 1.50%) 65% of a third 50 bps hike on July 27 (to... Read More
Active managers across markets are struggling as the Fed begins its rate hiking campaign. Investors seem willing to ride out market volatility, but not bet that money managers will keep up.... Read More
Risk markets are rallying in the face of an inverted yield curve, the highest inflation in 40 years, and continuing war in Ukraine. We discuss current market positioning.... Read More
When the 10-year less 2-year yield curve inverts, 10-year yields often peak. When the 10-year less 2-year yield curve turns positive again, the Fed is often about to start cutting rates to head off a recession. 10-year yields historically decline during this period.... Read More
