Something is afoot in the bond land – in how bond shorts are viewing things. They have used the sharp decline in the 10-year T-yield post-December 13th FOMC meeting to aggressively go short these notes, betting on higher rates. They … Continued
This week’s dot plot indicated one more hike is possible this year. Equity bulls did not want to hear this. In the futures market, a wide gap remains between what fed funds traders see things and what the Fed tells … Continued
Having raised the fed funds rate by 525 basis points over 14 months, the Fed is under pressure to stop, but is not willing to commit to that. The culprits are sticky core inflation and financial conditions that are easing. … Continued
The 2Q earnings season begins next week in earnest. The bar is low. Ahead of this, large-caps are leading but economically-sensitive small-caps are lagging. The latter likely is eyeing the 500-basis-point rise in the fed funds rate since March last … Continued
The FOMC dot plot yesterday surprised many with expectations of two more 25-basis-point hikes by December. Futures traders are only betting on one hike in July. Several times over the last several months, they have been forced to readjust; odds … Continued
After hiking 10 consecutive times totaling 500 basis points, the Jerome Powell-led Fed hinted at a pause on Wednesday. Markets are now pricing in three 25-basis-point cuts by year-end. Powell – focused on inflation – promptly dashed hopes for rate … Continued
The two-day FOMC meeting ends today. Unlike calls from some major brokers not to raise, the policy-setting body in all probability will hike by 25 basis points to a range of 475 basis points to 500 basis points. More importantly, … Continued
The federal government is up to the gills in debt. Interest payments run up in the billions every year. This was not much of an issue in a low-interest-rate environment. But right now, the Federal Reserve is tightening. Higher rates … Continued
It is a seasonally strong period for stocks. Bulls are wasting no time getting ready for this. Stocks are rallying. In the best of circumstances, there is room to run still, with the caveat that an important inflation report is … Continued
In the early months of 2020, the Fed aggressively flooded the system with liquidity, meeting three times in March alone. That was the need of the hour. Now, it probably needs to act with a similar speed – only in … Continued