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Had the Federal Reserve been bound by some version of the Taylor rule, rates would have automatically adjusted as soon as inflation began to tick up in 2021. As it is, wishful thinking, misleading narratives, and an unaccountable few have given the global economy a series of unnecessary and deadly shocks.
Media reports claim this debt prevents economic recovery. Chuck Schumer would erase it with the flick of a pen. Elizabeth Warren would remove it to free students’ ability to buy a house and form a family. Janet Yellen opines paying off student loan debt (SLD) will free up venture capital.
Federal Reserve Tampering with Interest Rates Distorts the Shape of the Yield CurveOct 21, 2022 - 11:45:30 PDT
For many commentators, a change in the shape of the differential between the long-term interest rate and the short-term interest rate—i.e., the yield spread provides an indication of the likely direction of the economy in the months ahead.
Oct 21, 2022 - 11:38:26 PDT
The Federal Reserve may be forced to pivot. This may be one reason why the Dow is up 565 points today (+1.86%) as recession and pain become ever more likely.
Fed Quietly Sends Record $11 Billion To Switzerland As Dollar Funding Shockwave Crushes Central BanksOct 21, 2022 - 11:34:01 PDT
Needless to say, the fact that the Fed is already quietly shuttling tens of billions of dollars to various central banks to plug dollar overnight funding holes, confirms that the rising dollar has already done just that. One look at the meltup in FRA-OIS - the most widely used indicator of interbank lack of funding and liquidity - which just hit a fresh 2022 high, is enough confirmation.
Oct 21, 2022 - 08:47:05 PDT
The fire-sale prices in stocks are not here yet, given all the problems in store, but when the cost of government interest gets to where the Biden Administration (like Trump), and especially congress, starts maximizing Powell pressure to lower rates..
Oct 21, 2022 - 08:43:53 PDT
Dr. Nomi Prins examines the games the wealthy elites play while the 99% suffer.
Oct 21, 2022 - 08:38:19 PDT
Pension funds have long been investing in “safe” agency mortgage-backed securities. But as The Fed does its “tighten up”, we are seeing agency MBS prices falling and duration risk rising.
Roubini: Central Banks to “Wimp Out” From Fighting Inflation, Could Fuel a Major Financial CrisesOct 21, 2022 - 08:11:52 PDT
The global economy is set for a period of decline that mirrors the crashes of the 1970s and 2008, Nouriel Roubini has warned.Gus Ruelas/Reuters
Oct 21, 2022 - 07:31:49 PDT
U.S. lawmakers are considering voting to approve $50 billion in security and financial assistance to Ukraine – before the new Congress is seated in January 2023, NBC news reported on Oct. 20, citing congressional sources.
Former Treasury Secretary Lawrence Summers said that policy makers in the US and elsewhere should heed the fiscal lessons from the UK’s recent crisis, and not assume Britain’s troubles were unique.Most Read from BloombergTrump Deposed in Suit by Investors Claiming Fraud in ‘Apprentice’ Videophone PitchesChina Summons Chip Firms for Emergency Talks After US CurbsTwitter Tumbles as US Weighs Security Reviews for Musk DealsLiz Truss Odds: The Front-Runners to Replace the Prime Minist
WSJ Fed whisperer Nick Timaraos has set the narrative once again this morning, writing that while 75bps is a done deal for the November meeting, the FOMC discussion will be a "critical staging ground" for potential step down to 50bps in December.
Oct 21, 2022 - 05:58:44 PDT
“Seventy five is the new 25,” she says. “When you are raising rates in 75-basis-point increments and you’re not giving any time for it to process through and make its way through into the data, you’re playing a dangerous game,” she says on the latest episode of What Goes Up. “And the more you’re doing it, the more likelihood you create of having a recession—and a significant recession.”
Raymond James Downgrades Homebuilder Stocks As 7% Mortgage Rates ‘Cripple’ Housing AffordabilityOct 21, 2022 - 05:54:53 PDT
Raymond James analysts Buck Horne and Tousley Hyde on Friday downgraded shares of KB Home undefined, Lennar Corp. undefined, M.D.C. Holdings Inc. undefined,...
Oct 21, 2022 - 05:50:36 PDT
Despite recent gains in the EUR/USD, the medium-term outlook for the currency pair remains gloomy amid global recession fears.
The onshore yuan fell to the weakest level in 14 years as the dollar strengthened on hawkish comments from a Federal Reserve member and as Covid-led lockdowns in parts of Xi’an intensified growth concerns.
Japan's core consumer inflation rate accelerated to a fresh eight-year high of 3.0% in September, challenging the central bank's resolve to retain its ultra-easy policy stance as the yen's slump to 32-year lows continue to push up import costs.
According to the Conference Board's Leading Economic Indicators index, conditions worsened in September, with the gauge down 0.4% from the month before and off 2.8% for the six-month period.
Overlapping Crises Add Urgency for IMF, World Bank Resources, Reforms: AnalysisOct 21, 2022 - 05:37:25 PDT
Global financial leaders are digging into a long to-do list after International Monetary Fund and World Bank member countries sent them a clear message on what is needed to tackle overlapping crises: vast amounts of additional money.
British prime minister’s resignation after 45 days underscores how anti-inflation fight is remaking markets.