Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

FOMC at Center Stage

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Below are the Opening Notes and Bond Market segments from last Sunday’s edition of Notes From the Rabbit Hole, NFTRH 530. Jerome Powell was actually more firm than I expected. Atta boy Jay! Aside from my prognostication the more important stuff (IMO) begins at the 4th paragraph. That is where I put on my tin foil hat and tell what I think. It does seem to dovetail with what we saw today out of the Fed chief.

Opening Notes: FOMC at Center Stage

It is likely that the Fed is going to raise the Funds rate on Wednesday because this is a confidence game and a Fed suddenly showing weakness and doubt could exacerbate the market’s already frayed nerves. As a side note the 76% reading of CME futures traders expecting the hike to happen has not changed in the last few weeks.

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All Out of Truce Juice

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You’re going to hear a quintet of words many times over the next day: “All Eyes On The Fed“, as the bloodied financial world prays that Jerome Powell will have absolutely no backbone at all and, out of fear of getting a mean tweet from the President, will cease raising interest rates. This morning, we can also see the hope that he will in fact wilt built into a saucer pattern on the ES:

dish
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A Post-Powell View of USD, S&P 500 and Gold

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The Fed blinked. This was not news to Macro Tourist Kevin Muir or readers of Biiwii.com, which is very pleased to publish his work.

Fed Finally Blinks

Amid a weakening global economy, gathering signs of weakening in the US economy and a dump in inflation expectations, Jerome Powell implied that the Fed may be going on hold for a while after a December rate hike.

This graph from SG Cross Asset Research/Equity Quant by way of Kevin Muir’s article attempts to show that the accumulated rate hike tightening and “shadow” tightening as a result of QE suspension has now met or exceeded the levels that preceded the last two economic recessions. (more…)