2018 Commentaries

CNBC this morning

Here are some bullets for my market discussion on CNBC: 1. Many in the markets are attributing the recent bout of volatility to the federal government shutdown. That is likely a mistake. We have had 22 shutdowns over the last 40 odd years with very limited market consequences. Shutdowns and sharp increases in market volatility […]

read more

The Williams Put??

John William’s interview earlier today on CNBC should be a lesson to Jay on how to bring a little humility into the monetary policy arena. John’s diplomatic tone with regard to listening to market signals, speaking to business leaders, and watching the economic data should begin to sooth the many frayed nerves out there. Based […]

read more

Flip-Flop, Flip-FLOP

Since early October I have found Fed communications quite difficult to understand. And based on the increased turmoil in financial markets, it appears I’m not alone here. Now, we could spend an enormous amount of time parsing through the potential reasons for this increase in Fed opaqueness, but I doubt we would ever uncover the […]

read more

The terminal funds rate redux

Currently the futures market projects that we will reach the terminal funds rate for this business cycle just after the highly likely 25bps increase at next week’s FOMC meeting. The Jan 2019 implied fed funds rate is 2.39%. The Jan 2020 implied rate is 2.58%, and the Jan 2021 implied rate is 2.52%. The market has […]

read more

The pause that refreshes

While recent whippiness in the daily price action of risk assets has most folks on edge, it is useful to take a step back and look at the bigger picture. Specifically, the year-to-date total return for the S&P was +0.32% as of close of business last Friday. Yes, we were still positive for the year […]

read more

Thanks Jay, I always enjoy a good Fed miscommunication

Monetary policy mistakes and miscommunications are the bread and butter of macro trading. Without them I probably wouldn’t have a job. Therefore, I want to give a big shout-out to Jay this morning for creating yet another wonderful opportunity for macro traders during Oct/Nov 2018. His gaffe in early October, and his stubbornness in retracting […]

read more
error: Content is protected !!