Jerome Powell seems eager to talk the talk on tackling inflation, but has yet to walk the walk. According to his 4 May published plan, the initial reduction in the Fed’s balance sheet should have kicked off at approx $47.5bn per month from 1 June, rising to $95bn per month by September. However, in the […]
Continue reading
Markets may be focused on rising inflation and bond yields, but this doesn’t fully explain the forces at play here, or the potential ramifications. One of these can be seen by the diverging spreads in government bond yields as an enforced tightening monetary policy removes central bank ability to artificially suppress funding costs for the […]
Continue reading
It’s not too difficult to identify the potential storm clouds gathering on the economic horizon, so why is it that two of the largest investment banks feel the need to state the blindingly obvious over the past week? It is not as if either Goldman’s or JP Morgan are known for their philanthropy in offering […]
Continue reading
The 1956 movie Forbidden Planet was at its core a tale of hubris; that technology can overcome nature, whether for Krell or human. The analogy for markets might be the conceit that the business cycle can be expunged without consequence and that one can borrow oneself out of debt. Like the ‘monster from the Id’ […]
Continue reading
A flattening yield curve is often seen as an ominous portend of economic doom, while a forced increase in interest rates can often ensure its delivery. This convergence however, is the conclusion of a tale that has been in the making for a couple of decades, but one where the inflationary consequences now threaten to […]
Continue reading
Talk about fast markets. Blink and you might have missed WW3, as markets broadly return to where they were just 5 days ago. Good news however, may not be so positive for asset prices as waning emergencies mean fewer excuses by hard-up governments to keep printing their way out of deficits. And that means its […]
Continue reading
Oops, those betting on a weak US jobs report for January have been seriously wrong-footed. Instead of the expected negative figure, the BLS not only reported over +400k of net jobs in January, but a +649k upward revision to the jobs growth reported for the previous two months. Roll-in an average hourly wage inflation approaching […]
Continue reading
Shock horror, according to official data on covid deaths without co-morbidities in England & Wales from the ONS (Office of National Statistics), there is no ‘shock-horror’, as cumulative covid deaths without co-morbidities up to the end of Q3 2021 total a mere 17,371 people, with an average age of around 81.5 years. Exclude all those […]
Continue reading