Another Fed Day is upon us. Attention will be focused on the "Dots" to see if the year end 2024 median projected Fed Funds rates will continue to show 3 rate cuts, consistent with the December projections or if the projections will be reduced to only show 2 rate cuts. The other indicator to be watched is whether the Dots reflect any upwards drift in the Fed's projections of the long-run neutral rate (see yesterday's post).
The force of the AI revolution is strong, sending stocks higher as yields await the Fed. The 2Y remains around 4.70% and the 10Y around 4.30% ahead of the Fed. Yesterday, the BoJ's long awaited end to NIRP (negative interest rate policy) came to fruition, along with their end to yield curve control and their end to ETF and REIT buying. All of this was seemingly already priced into the market, with the Japanese Yen actually weakening to over 150 against the USD.
I think I'll have a FOMC recap later in the day, so feel free to check back.
XTOD: NEW: Couple arrested in Florida after passing out drunk on the beach and losing their children. Some people shouldn't reproduce. Alyssia Langley and fiancé Timothy Stephens were arrested for child neglect, having alcohol on the beach and trying to escape the police after they were found passed out with no children in sight. When the couple finally waked up, it became clear that they had no clue where their kids, 5 and 7, were. After getting handcuffed, Stephens tried running from the police but was quickly stopped. Luckily, the kids were later found at a hotel pool.
[I mentioned George Selgin's quest to debunk claims that banks create money and need no funding, see here ].
XTOD: Well, it took a little longer than I had originally planned, but here is my (longish) essay defending the oh-so passé claim that banks are savings-investment intermediaries against the très chic view that they fund their loans with keystrokes: https://cato.org/sites/cato.org/files/2024-03/working-paper-80.pdf
XTOD: Both MMTs and Rothbardians agree that ordinary banks can and routinely do extend credit without having to acquire and fund their lending with anyone’s real savings. Now that I’ve given you ample reason to distrust the claim, find out just how wrong it is.
XTOD: This is worth a read for the monetary nerds out there. After the GFC it became popular for some to say banks and governments don't "fund" their spending from income or existing assets. Yes, banks and govts are creators of money, but they also rely on funding their spending.
XTOD: The great conservative insight is that order is really hard to achieve. It's really precious, and it's really easy to lose. — Jonathan Haidt
https://x.com/CollinRugg/status/1770195581358743736?s=20
https://x.com/GeorgeSelgin/status/1769758630105022670?s=20
https://x.com/GeorgeSelgin/status/1769758630105022670?s=20
https://x.com/cullenroche/status/1769770053879128175?s=20
https://x.com/eyeslasho/status/1769963511889760299?s=20
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