Maybe the quote above was in reference to the Fed's inflation fight? Speaking of the Fed, in an effort to stem the losses on their bond holdings they have decided to expand operations into the social media influencer sphere on Instagram https://www.instagram.com/federalreserveboard/ I'm sure Powell will be a successful influencer.
Yields are once again higher with the 2Y at 5.11% and the 10Y at 4.70%. The USD continues to climb. USD-JPY flirting with 150. The Fedspeak yesterday from the likes of Bowman, Barr and Mester sounded nearly unanimously centered on the higher for longer rate path.
U.S. manufacturing data yesterday was also stronger than expected with employment strong and the prices paid component showing some relief. However, with respect to the prices paid, the ISM report notes that higher energy prices could affect that data point going forward. Timothy Fiore, the Chair of the Institute for Supply Management's Manufacturing Business Survey Committee added in the report: "More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 6 percent in September, compared to 15 percent in August and 25 percent in July, a clear positive,”
U.S. manufacturing data yesterday was also stronger than expected with employment strong and the prices paid component showing some relief. However, with respect to the prices paid, the ISM report notes that higher energy prices could affect that data point going forward. Timothy Fiore, the Chair of the Institute for Supply Management's Manufacturing Business Survey Committee added in the report: "More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 6 percent in September, compared to 15 percent in August and 25 percent in July, a clear positive,”
On the day ahead it's Bostic speaking and the JOLTS data as highlights. Overnight the Royal Bank of Australia held their cash rate at 4.1%.
XTOD: MLB Wild Card Get-in Prices (Game 1)
XTOD: When Fed was remitting hundreds of billions to Federal budget from its portfolio earnings, it was counted as revenues to the budget. Now that the Fed is running a loss and shelling out huge interest payments to banks on cash deposits, it does not count as expenditures to the budget. Magic accounting that doesn’t conform to GAAP rules.
XTOD: United Airlines would save $80 million a year if the average passenger weight falls by 10 pounds
3 pm ET: Rangers @ Rays: $33
4:30 pm ET: Blue Jays @ Twins: $7
7:00 pm ET: Diamondbacks @ Brewers: $22
8:00 pm ET: Marlins @ Phillies: $199
XTOD: Fed's Mester Says One More Rate Hike Likely, Then Hold For Some Time
XTOD: Dear author. We need to talk. Please review the last several decades and you will see stronger economic growth occurring when interest rates were higher than they are today. The ZIRP era brought us useless innovations like Bored Ape NFTs. But it also led to world-changing innovation, says
@karlbykarlsmith via opinion...Truly promising innovations will attract capital. They always do. And with higher rates, they won’t have to compete with all those idiotic “innovations” that have been able to attract investment dollars because of ZIRP...Low productivity, wealth inequality, increased corporate concentration, excessive leverage, financial instability, rampant speculation - these are all enabled by ultra low rates. Happy to send you the studies if you’d like...Is it worth tolerating all these negative side effects, just to make it easier for some unspecified, theoretical “moon shot” to get capital?...Boosting the attractiveness of tech investments and enriching the prospects of venture capitalists are not part of the Fed’s mandate.
XTOD: When Fed was remitting hundreds of billions to Federal budget from its portfolio earnings, it was counted as revenues to the budget. Now that the Fed is running a loss and shelling out huge interest payments to banks on cash deposits, it does not count as expenditures to the budget. Magic accounting that doesn’t conform to GAAP rules.
XTOD: United Airlines would save $80 million a year if the average passenger weight falls by 10 pounds
XTOD: The USD is strong due to 1) relative yield spreads and 2) relative energy balances.
Even if monetary policy makes a U-turn, policy-makers can't change the ongoing imbalances in the energy space, and a weaker USD seems very unlikely from here.
XTOD: I don't really know what my equity view is right now. Seasonals are raging bullish but this chart gives me pause. I am generally not a huge fan of the inverted yield curve as a predictor of recession because it doesn’t include a timing factor and therefore ends up costing people much money as they position way too early for the inevitable recession.
A potentially somewhat better timing indicator is when there is a bear steepening during a period of yield curve inversion. This next chart shows those occasions in blue and US recessions in red.
You can see the blue bars have generally been pretty terrible times to own stocks. The signal in April 1999 was early, but the signal timing in 1990 and 2007 was excellent. Small sample size, obviously. No call to action here, it’s just something to think about and it’s an offset to a bullish seasonal risky asset view. The ongoing collapse in gold is a bit of a yellow flag with regard to current liquidity conditions, too.
https://x.com/TickPick/status/1708964146614530471?s=20
https://x.com/SheilaBair2013/status/1708913878711611712?s=20
https://x.com/pdacosta/status/1708989511051465152?s=20
https://x.com/judyshel/status/1708839926010098091?s=20
https://x.com/AndreasSteno/status/1708938157670944924?s=20
https://x.com/business/status/1708653547850494323?s=20
https://x.com/donnelly_brent/status/1708865438728224849?s=20
https://x.com/judyshel/status/1708839926010098091?s=20
https://x.com/AndreasSteno/status/1708938157670944924?s=20
https://x.com/business/status/1708653547850494323?s=20
https://x.com/donnelly_brent/status/1708865438728224849?s=20
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