Last week the unemployment rate hit a cycle low of 3.8%, a level that was last seen in April 2000, at the very end of the Goldilocks era. Prior to that you would have to go all the way back to the “golden age” of the late 1960s in order to find rates this low....
I have only written a couple times on Europe over the last 18 months. Once in the lead-up to the Dutch election and again in the lead-up to the French election. The titles of those notes were “Trump, the great unifier of Europe” and “Trump, the great unifier of...
Those folks in the 4 hikes in 2018/4 hikes in 2019 camp are probably not too happy after reading the May FOMC minutes. Here are a couple of excerpts that probably stung a little: “… some participants noted it might soon be appropriate to revise the forward-guidance...
“With all the crazy monetary experimentation over the last 10 years, how in the world did we not generate excessive amounts of inflation? Surely negative short-term real rates for so long, with a 5x increase in the Fed balance sheet, should have taken us back to...
Taking a step back from day-to-day market minutia, the rather mundane story for 2018 is that spoos and the dollar are largely unchanged while 10yr Treasury yields are up about 50bps. That said, the paths to unchanged for spoos and dollar have been quite different. At...
With just about four months of 2018 under our belts, spoos are down about 1.5% while 10-year Treasuries are up about 60bps in yield. If you had not been watching the daily price action since January, you might think the VIX would be sub-10 and the MOVE would be north...
I received a number of very similar responses to this past Monday’s note on the Libor/OIS spread. It seemed a group of readers felt I was completely dismissing ANY importance of the recent move. That couldn’t be further from the truth – so let me clarify. The point of...
While a return to 1970s-style wage inflation and 1930s-style trade wars is all the rage across the hater community, another brick in the 2018 wall of worry that comes up consistently when speaking to clients is Libor. The old 2007-09 proxy for funding market stress,...
Fiscal policy, regulatory policy, and even Fed policy have taken a back seat to the new driver of daily swings in financial markets: trade policy. I have spent a bit of time in recent notes over the last month trying to dissuade folks from getting too bent out of...
Fiscal policy, regulatory policy, and even Fed policy have taken a back seat to the new driver of daily swings in financial markets: trade policy. I have spent a bit of time in recent notes over the last month trying to dissuade folks from getting too bent out of shape about the recent escalation in […]
