Last week ended with markets generally blowing off Powell's message of higher for longer and continuing to aggressively price in rate cuts beginning as early as March. Yields start the week higher by 3-4bps with the 2Y at 4.61% and the 10Y at 4.25%. With the Fed on blackout this week all eyes will turn to labor market data and this Friday's jobs report. The rest of the days will be filled with talking heads trying to explain why gold is rallying, enjoy.
Today: Factory Orders
Tue: Markit PMI, ISM services and JOLTS. Bank of Canada rate decision.
Wed: ADP, productivity
Thur: Jobless claims, inventories
Fri: Jobs Day in 'merica and UofM survey
XTOD: I would love to see more concrete/thoughtful answers to the question of "what should you _personally_ do, for yourself, if you think AGI/ASI are within 10 years from now?"
XTOD: The science of quantum computers is deep and we can’t scratch the surface, but we hope to explain enough so you won’t be blindsided by a technology that could transform civilization. Scott Pelley reports, tonight. http://60Minutes.com
XTOD: How much have Fed expectations moved this week? Last Friday (orange, Nov 24) had 3 cuts priced in for 2024, with the first in June. Today (blue, Dec 1) has five cuts priced in for 2024, starting in April (straddling the March 22 and May 1 meetings). -- This is a massive move for a week that did not have a CPI or Payroll report. But the week did start with Waller and end with Powell.
XTOD: He tried …Per the Bloomberg headline below, #FederalReserve Chair Powell tried to push back against market pricing of notable rate cuts next year noting “it would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.”
He added: “We are prepared to tighten policy further if it becomes appropriate to do so.”
Yet yields have moved significantly lower today, including a 10 basis point for the very #Fed-sensitive 2-year.
XTOD: *POWELL: FED POLICY RATE IS 'WELL INTO RESTRICTIVE TERRITORY'
*POWELL: FED PREPARED TO TIGHTEN MORE IF IT BECOMES APPROPRIATE'
*FED'S POWELL: PREMATURE TO SPECULATE ON WHEN POLICY MAY EASE
Market: Got it, rate cuts definitely starting in March!
XTOD: I have said it a million times. If Powell even TRIES to print with inflation at 4% the long bond will go bid-less. How many would you want to own? I mean own--as in wear--not flip to the Fed. He will have to buy them all, which is a nonstarter.
XTOD: Don't let your dreams of a "bonanza" lead you to "expose yourself to the possibility of a catastrophe" - Howard Marks
XTOD: The only people who never feel like impostors are narcissists. Being 100% sure of yourself at all times betrays arrogance and breeds complacency. Questioning yourself reflects humility and propels growth. Pangs of doubt are a normal, healthy human response to new challenges.
https://x.com/nabeelqu/status/1731413471470756052?s=20
https://x.com/60Minutes/status/1731459580331241969?s=20
https://x.com/biancoresearch/status/1730703294912188660?s=20
https://x.com/elerianm/status/1730630159504396536?s=20
https://x.com/Econ_Parker/status/1730623104731242547?s=20
https://x.com/Stimpyz1/status/1731410809384042789?s=20
https://x.com/joyofcompoundin/status/1731290357713850606?s=20
https://x.com/AdamMGrant/status/1731018939478557108?s=20
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