It now feels lost in the shuffle, the BOJ raised its policy rate to 0.25% and also laid out a further tapering of their bond buying program. Governor Ueda also set up the possibility of further rate hikes at the coming meetings. The Yen liked the rate hike, rallying strongly as the market hadn't fully priced in the hike. USD:JPY back under 150.
You can find my FOMC recap by navigating this blog, I believe in you. Most everyone seems to believe Powell is positioning for a September cut. As an aside, it will be funny when the Fed cuts 3x this year and they’re like “see just like we projected at the start of the year”. Bond yields fell following the FOMC presser with the 10Y now at 4.06% and the 2Y down to 4.27%. Remember when we were in the 3.80s on the 10Y at the start of the year? Stocks did what stocks do, rising as we all believe in AI (thanks META) and rate cuts again. NVDA reportedly added $329 billion in market cap...cool.
In other data the employment cost index rose by less than expected, ADP employment was lower than expected and in the EU inflation was higher than expected.
Also lost in the shuffle of Fed day is rising risk in the Middle East.
On the day ahead it's BoE, Jobless Claims and ISM Mfg.
XTOD: Jay Powell appears to say: another near-quarter of data telling us that the macroeconomy is normalizing, and we at the Federal Reserve will start to normalize interest rates and the yield curve. But another quarter of normalizing data will produce a macroeconomy that is...well, normal. And policy should normalize in step with the economy, not lag behind—that guarantees a complex root in the dynamic equation, hence pointless disruptive stop-go cycles. And what would a “normal” yield curve look like today, anyway?
XTOD: Fed: We decided to take our chances waiting to cut rates cause our jobs are not at risk, only yours are. No seriously, if they get this wrong again not one of them will get fired.
Nobody got fired for the GFC or transitory.
The only ones that had to leave against their will by "retiring" were the ones caught insider trading.
XTOD: REMINDER: Anytime the media quotes a poll, or a prediction market, or a survey -- without simultaneously disclosing the prior track record of that item over the past few election cycles -- they are committing journalistic malpractice...
XTOD: Since 2022, $META revenue up 40% yet # of employees down 19% despite massive new investments in AI. AI is not only extending and accelerating Meta revenue growth, it is also leading to big leverage on people / opex.
XTOD: Israel has sent Diplomatic Back-Channel Messages to both Iran and Lebanon, stating that they are willing to go to Full-Scale War if Iran, Hezbollah, and other Iranian-Backed Groups conduct a Retaliatory Response which causes Significant Damage and Casualties in Israel.
XTOD: High draft pick. Doesn’t seem that good. Still a big time player despite not being that good. Gets to the big stage and goes on a heater of a lifetime to take down the Bob Kraft supported overwhelming favorite. Turns out they’re pretty good if not great. Kamala is Eli Manning.
XTOD: "I believe in maximum flexibility, so I reserve the right to change my position on any subject when the external environment relating to any topic changes too." --- Henry Singleton
https://x.com/delong/status/1818799287675003130
https://x.com/NorthmanTrader/status/1818710776330281353
https://x.com/Ritholtz/status/1818793785981014267
https://x.com/altcap/status/1818761380977381428
https://x.com/sentdefender/status/1818769873176346933
https://x.com/Wertwhile/status/1818435205331321342
https://x.com/CharlieMunger00/status/1818421858913648854
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