It has been a robust start to the year for those with bullish tendencies: spoos +5%, CT10 +20 bps, and blues +30 bps. The market has clearly been rerating the potential strength of the US economy higher post-tax reform. And I would also argue that the deregulation...
This past weekend we had our annual Jefferies senior leadership offsite. And as always, it was great to catch up with so many of our business leaders from around the globe. For me the most exciting part of this event is taking the temperature of the attendees. And to...
This time of year you are no doubt receiving volumes of research from banks and brokers on the financial market outlook for 2018. And most likely these publications (if printed) would resemble oversized coffee table books. Now I’m sure there exists something of value...
We had three major central bank meetings during a 24-hour period this past week, and in the aftermath the global financial markets collectively yawned. I suppose after a year characterized by never-ending “Yksnim” moments, it was a fitting conclusion to 2017. However,...
Last week provided yet another example of why spoos and blues is such a powerful trading strategy. This past Thursday, between 11am and 11:30am, spoos air-pocketed 1.6% on what was later confirmed to be an incorrect ABC news story. Now that might not sound like a...
Over the last week or so a number clients requested both clarification and elaboration on my most recent note, “Fiscal Stimulus: Another Force for Disinflation.”. Generally speaking, folks wanted more precision on the impact of corporate tax reform on wage rates,...
Earlier this month the Fed began to cap the quantity of maturing proceeds they regularly reinvest back into the Treasury and agency MBS markets. This marked a crucial turning point for the Fed balance sheet, as it kicked off the first meaningful contraction of the...
The Powell trial ballon went out last week and risk markets applauded. This week Taylor got a nudge into the center ring, and traders are all choking on their breakfast sandwiches. Most market folks, myself included, have leaned toward the idea that the Trump Fed...
I will keep this note very brief post the CPI. This year has been characterized by consistently strong employment data and weak inflation data. And today's soft inflation number combined with last week's strong employment print adds further credence to the idea that...
Since the election Janet has tightened monetary policy at the December, March, June, and September FOMC meetings. In her latest move this past Wednesday, she kicked off balance sheet normalization and signaled strongly that next December would be a "live” meeting. Now...
Since the election Janet has tightened monetary policy at the December, March, June, and September FOMC meetings. In her latest move this past Wednesday, she kicked off balance sheet normalization and signaled strongly that next December would be a "live” meeting. Now it has always been my contention that Janet would try her best to […]
