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From the Vault

This month's "From the Vault" is a little more recent than usual, but I thought it would be an enjoyable reprint before year end. We don't need rate cuts to get risk assets to go higher - April 10, 2024. The CNBC video below from one month ago, after the hotter CPI...

Thankfully, Scott Bessent is no Bob Rubin

It’s been three weeks since Trump's win, and so far spoos have rallied around 3.5%, while EURUSD has depreciated around 3.5%. I suspect most macro traders would have predicted moves exactly like these in the equity and currency markets, even if 17 Nobel laureates were...

Efficiency vs Equity; Trump vs Harris; Spoos vs Blues

Before kicking off today’s missive I want to remind those in the NYC area about our “Macro & Margaritas” event at 5pm on Tuesday, Oct 8th at one of my favorite Mexican spots — Tacombi Flatiron. Please reach out to your Jefferies salesperson if you would like to enjoy...

From the vault: 4-Oct-2023

Given yesterday's note, I thought this would be a good piece to bring back from the vault for the month of October. _________________ A balance sheet above neutral creates a higher neutral real interest rate (4-Oct-23) Today I’m going to continue focusing on the Fed...

Is the neutral rate headed back to 2%?

Since the beginning of 2023, I have argued that monetary policy was never as restrictive as interest rate levels might suggest. Specifically, in the brave new post-GFC world of QE, the Fed balance sheet affects the overall stance of monetary policy long after...

The future is so bright, I gotta cut 50

Wednesday's FOMC was highly unusual. A 50bps cut, an optimistic economic outlook, and hawkish forward guidance have never combined at an FOMC meeting that I can recall. Historically, 50 was always a bazooka, reserved for highly stressful times when recession risks...

Rethinking the pace of a return to neutral rates

On Monday morning at 9am EST I am going to host a zoom call focused on the speed with which the Fed is likely to return to a neutral policy stance. A quickened pace post the election is likely to have important implications for equity, currency, credit, and commodity...

From the vault: 24-Feb-2011

I thought this very concise commentary below from over 13 years ago would be a nice way to kick off September. The Fed put structure has been a critical feature in my writing since first starting at Jefferies nearly 15 years ago. The put has come a long way, through...

The case for a rapid return to a neutral rate structure

As a good Greek, I tried my best to disengage from work during the month of August and rest up before hitting the road on an unusually aggressive fall travel schedule. That said, in the early part of the month, I felt obliged to write a quick note from the beaches of...

This is why we hold the blues!!

The Fed, the BoJ, payrolls, the US presidential election race, tech earnings, and the escalation in the Middle East have all conspired to create some heavy derisking. Volatility was low, and complacency was high heading into the mid-July all-time highs for spoos. And...
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