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Happy new week, everyone. Let us celebrate that we don’t have to deal with a mandatory three-day weekend for – – errr – – well, I guess just a couple of weeks. Sheesh, let’s face it, there are WAY too many holidays for our own good.
Well, the news isn’t all bad.
The not-at-all-surprising announcement came that interest rates would remain untouched, and here are the initial reactions (note that, as of this composition, the press conference has not begun).
If you want a sense as to how quiet it is this morning, look no farther than SpaceX. After blasting 50% higher during its first two days of existence, it is effectively unchanged right now. Meandering aimlessly, all night long.
It seems, I suppose, everyone is waiting for the Fed announcement and the debutante ball of Kevin Warsh. I’m not sure why anyone cares about this guy announcing no change in rates versus Powell announcing the same thing, but evidently, it’s quite the BFD, so everyone is sitting on their hands.
(more…)Pardon the mostly non-market related post. But it’s something I’ve wanted to put in writing for a long time. The Fed is at the controls of the inflation-making machinery in the US (as are global central banks in their own countries).
Inflation does not just appear, as if by some mystical financial mechanism. Inflation is produced with the ease of firing up the printing press. More dollars + finite assets = asset prices rising in those inflated dollars. Not rocket science.
(more…)In a couple of hours, Mr. Powell is going to ride off into the sunset. He’s a lucky man. The next chair is going to have to contend with a complete shitshow as bonds plunge and interest rates rocket higher, against all the wishes of the administration.
The TLT, shown below, has been grinding away for years, but it’s clearly an ill beast.
