The drawdown in the RRF is a perfect example of long and variable lags. That's just about done. Yellen has a bit of room to add liquidity from the TGA. But anyway you look at it reducing the rate of tightening is still tightening and Fed funds is still restrictive. Given the headwind that base effects pose, the Fed will be late again and while I don't know what they will do, they will likely overreact as they always do.
I have yet to see them take responsibility for their policy errors, ever.
correct - with an election coming, the markets will be juiced with 6K coming on S&P and probably about 6% on the 10 year .... Look for the STHF after the 1st half of next year and maybe into 2026. Good Luck
Most Americans are too stupid to figure it out and have no idea the danger we face with all this reckless spend
There is always a Fed put!... which really began with Fed Chair Alan Greenspan who began the long term policy of monetary accommodation. As the US Debt:GDP passed 100% recently, the put has become necessary because repayment of the debt with dollars valued at the current 2024 level will never be able to occur.
If financial markets were to collapse, default becomes more likely- something politicians cannot allow to happen as they lose their power.
So currency debasement must be the mechanism, and that means rates held below the actual rate of inflation over an extended period of time. Bitcoin and gold rally whenever this reality comes into focus, like this past week.
Another very well written, educational, article about what's "real" for the Macro plumbing of our consolidated closed US monetary system.
UST Total Outstanding Deficit Debt and the "FED PUT" base currency funding liability mix policy decisions continuing to maintain "bubblisious" Ample Reserves...I consider this a Hampster Wheel to Monetary Oblivion!
How do you account for the 2023 $140 Billion Operating Loss booked as a Deferred Asset on the FED balance sheet? I consider it an Account Receivable from US Taxpayers and it should be added to the current outstanding UST Deficit Debt to disclose our "real" liability financial position as a % of nominal GDP...agree/disagree?
Insights will be greatly appreciated? Keep up the excellent work!
So how do you think this affects other assets such as the dollar, Gold and commodities? Also, which equity sectors are most likely to benefit? Finally, what could derail this fed put?
The drawdown in the RRF is a perfect example of long and variable lags. That's just about done. Yellen has a bit of room to add liquidity from the TGA. But anyway you look at it reducing the rate of tightening is still tightening and Fed funds is still restrictive. Given the headwind that base effects pose, the Fed will be late again and while I don't know what they will do, they will likely overreact as they always do.
I have yet to see them take responsibility for their policy errors, ever.
''I have yet to see them take responsibility for their policy errors, ever.''
Not gonna happen...
Alfonso thank you great informative information as always. Buona domenica.
Buona domenica a te!
Hi Alf I would like to invite you to our studio to talk about this matter. Plse respond to nico@deaandeelhouder.nl
Sent you an email!
Thanks Alfonso for sharing your thoughts every week!
My pleasure, thanks for reading
Thanks for sharing your opinions and knowledge on the macro subject.
My pleasure, and thanks for reading!
correct - with an election coming, the markets will be juiced with 6K coming on S&P and probably about 6% on the 10 year .... Look for the STHF after the 1st half of next year and maybe into 2026. Good Luck
Most Americans are too stupid to figure it out and have no idea the danger we face with all this reckless spend
Excellent recap!
There is always a Fed put!... which really began with Fed Chair Alan Greenspan who began the long term policy of monetary accommodation. As the US Debt:GDP passed 100% recently, the put has become necessary because repayment of the debt with dollars valued at the current 2024 level will never be able to occur.
If financial markets were to collapse, default becomes more likely- something politicians cannot allow to happen as they lose their power.
So currency debasement must be the mechanism, and that means rates held below the actual rate of inflation over an extended period of time. Bitcoin and gold rally whenever this reality comes into focus, like this past week.
Most informative and informed analysis as always
How do you know if the QT reduction will come from bills or bonds?
Alf
Another very well written, educational, article about what's "real" for the Macro plumbing of our consolidated closed US monetary system.
UST Total Outstanding Deficit Debt and the "FED PUT" base currency funding liability mix policy decisions continuing to maintain "bubblisious" Ample Reserves...I consider this a Hampster Wheel to Monetary Oblivion!
How do you account for the 2023 $140 Billion Operating Loss booked as a Deferred Asset on the FED balance sheet? I consider it an Account Receivable from US Taxpayers and it should be added to the current outstanding UST Deficit Debt to disclose our "real" liability financial position as a % of nominal GDP...agree/disagree?
Insights will be greatly appreciated? Keep up the excellent work!
Excellent piece this week where Alf provided some amazing context. Thx!
So how do you think this affects other assets such as the dollar, Gold and commodities? Also, which equity sectors are most likely to benefit? Finally, what could derail this fed put?
Gold is rising