2022 Commentaries

Peak Volcker

In my last note back on Nov 29th, prior to Jay’s Brookings speech and the December FOMC meeting, I penned the following: Looking ahead, I want to recommend … just riding an outright long spoo position for the time being. I know Jay is likely to be hawkish…, but somehow I feel like that is […]

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Regulated crypto is far scarier than unregulated crypto

Before I start my first-ever crypto commentary, a couple of housekeeping notes are in order. First, on Dec 7th in New York City I will be hosting a fireside chat with Niall Ferguson. As many readers will remember, Niall and I held a virtual fireside chat in Q1 2022 just as the war in Ukraine […]

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Opportunistic Disinflation

Back on 1-Nov-22, just before the last FOMC meeting, I penned the following lines at the end of a note entitled “The Pivot and Financial Instability”: …we are likely coming in toward the final stages of this tightening move. After this week, there will have been 400 bps of short rate tightening. And by the […]

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The FOMC softens while Jay flexes

It’s been quite a while since the message in an FOMC statement stood in such sharp contrast to the tone of a press conference. In fact, I cannot remember a time when the dichotomy was greater. One can only surmise that Jay’s well-advertised Volckeresque vision for policy in 2022 now sits much more on the […]

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The Pivot & Financial Instability

Conventional wisdom suggests that in a typical tightening cycle the Fed raises rates until something breaks. Then, the storyline goes, a policy pivot begins — reluctantly at first, but eventually with a whole lot of vigor. The timing and market source of this proverbial pivot have become the primary focal points of nearly all of […]

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Warm and fluffy nominal cushions

My last two notes have centered around the concept that the short-term pain of aggressive Fed tightening is exactly the type of tough love that is required to sustain a structurally positive long-run US growth outlook. Without such a stern policy response to this unfortunate sequence of inflationary negative supply shocks, longer-term inflation expectations would surely become […]

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