Discover and read the best of Twitter Threads about #FED

Most recents (24)

What really causes inflation? 🧵

[a thread for normies - like me]
2/ The problem with #inflation is that it's a very personal experience.

As I always say, the wallet is the most sensitive organ in the body, so my inflation might not be your inflation.

In fact, my inflation could be seen as #disinflation by you... (more on that later)
3/ Price inflation and monetary inflation have different definitions:

* For many.- #inflation is the increased prices paid for goods & services.

** To others.- it's a decline in the purchasing power of your #money.

*** In layman's terms.- Too much money chasing too few goods. Image
Read 25 tweets
🇺🇸 (1/10) | As I already warned several times, the #housing #recession has gained traction since July as prices started dropping ⬇…
🇺🇸 (2/10) Today’s figures (Corelogic CS and FHFA) confirmed this assumption. Looking ahead, latest proxies already point to a larger drop in August.

🇺🇸 (3/10) In addition, the recent bounce of #mortgage rates implies that sales’ cancellations will rise, and demand (at least from 1st time buyers) will collapse. As a result, downward pressures are expected to intensify from September.
Read 10 tweets
Reflections on the morning after - and especially the markets… 🧵

It may well take some time for the dust to settle on #KwasiKwarteng’s first #Budget (yes, 'Budget’: if it looks like a duck, walks like a duck and quacks like a duck, then it’s fair to call it a duck)...
The initial reaction from most economic commentators and in the financial markets has been a loud boo! There are some things I would have done differently. But the overall strategy is sound, and sentiment should recover as the economic benefits become clearer...
There are two aspects I particularly liked. One is the emphasis on breaking the ‘doom loop’ of weak economic growth and rising taxes, both with tax cuts and – at least as importantly – structural reforms on the supply-side...
Read 16 tweets
¿Cómo afecta a la economía mundial el hecho de que el banco central de los EE.UU @federalreserve haya subido las tasas de interés y el dólar en este momento sea el rey y la moneda "refugio" en el mundo?

¿Cómo te afecta a ti indiferentemente del país donde vivas?

[Hilo] 🧵

La 1ra pregunta que debemos hacernos es: ¿Por qué el dólar se ha apreciado en comparación con las monedas de los demás países del mundo? 🤔
En esta tabla podrán ver como el dólar se ha revaluado contra otras monedas desde que la #Fed comenzó a subir las tasas en marzo 2022:

2/15 Image
¿Por qué la FED subió las tasas?
Para reducir la inflación en EE.UU, ya que al subirlas el crédito se hace más caro, baja el consumo y por ende la inflación, pero paralelamente sube el desempleo y eso les crea un problema interno que es actualmente su dolor de cabeza.🤕🤒

Read 14 tweets
Today’s @federalreserve’s Federal Open Market Committee (#FOMC) meeting witnessed another historic 75 bps increase to policy rate levels (to a range of 3.0% to 3.25%) in an effort for the #CentralBank to manage its number one priority: fighting persistently high #inflation.
The #Fed, including in today’s meeting statement and in the Chair’s press conference, has been clearer than arguably any central bank in identifying its current goal and moving #InterestRates and #liquidity provision to achieve it.
Indeed, by moving the #Fed Funds rate for the third time in 75 bps increments we see clear evidence of a strong desire by the Committee to temper demand as a way to achieve its goal of #price moderation.
Read 13 tweets

Adamlar nasıl organizeler ? Kesik mavi çizgiye dikkat ediniz. Putin ortalığı germemiş olsa #FED korkusu ile petrol çakılıyor. Enflasyon hikayesi bitiyor. Geriyorlar ortamı bilerek.. Image
Bu gerginliği yapmamış olsalar, kimse ileri de FED takmaz. Neden ? Petrol düşüyor.
Neyi bahane edipte faiz diyecekler ? Piyasa demez mi enerji düştü işte ne faizi ? Araya gerginliği önden sokuyorlar millet rahatlamasın.
Read 4 tweets
Tam #FED günü Putin seferberlik ilan etti.

Bunlara tesadüf diyen, gitsin sahilde bir tur atsın
gelsin, hava alsın. Beynine oksijen gitsin. Image
Neden bunu yaptılar ?
Normal de bu tarz beklentiler yaşandığın da,
yani; FED toplantısı vb. Beklentiler önden alınır gerçekleşince satılır. Yani; fed atlatıldığı an dünya rahatlar. Haberi bastılar milleti negatif fiyatlamanın
için de tutuyorlar.
Altın fiyatları da en yakın sinyal ürettiği tarihi yazmıştım.
O güne de referandum koymuşlar.

Read 6 tweets
Let's read some history and learn about the FED, $DXY, #FOMC rates through they key events last 50 years

why 2022 is more like 1980?
is holding cash during inflationary crisis is good or bad?

Thread 🧵 Image
Except early 1980 inflation crisis, The FED had one answer to every other financial crisis, simply decreasing rates & pushing liquidity (aka printing brrrrrr $)

Starting 2008, we got QE (Quantitative Easing) in which the FED , purchases securities from the open market
that rates cut + QE + pushing liquidity was always the amazing solution for every financial crisis -again, except early 80s

why early 80s is different?
simply cuz all other crisis were markets generated, like DotCom bubble, housing market bubble, ... Image
Read 11 tweets
75 is a done deal but a weird one.

On one hand we have negative growth and #disinflation.

On the other we have the #Fed talking as hawkish as ever with the mkt expecting it to go 75 on Wed.

What will the #Fed do, and why, in Nov and beyond?

A thread.

Let me start by saying, regardless of the mkt expecting it, hiking 75 next week is a mistake.

Actually any hike is a mistake.

How can I say this when many have said (including the #Fed lately) that hikes need to be more aggressive in order to "kill" the #inflation?

Many still seem to neglect the fact that monetary policy works with a lag.

It takes time for the #Fed rate change to be absorbed through the system (transmission mechanism).

How long does it take?

Estimates range anywhere from 6M to 1.5 yrs.


Read 17 tweets
Anatomy of a policy error
There has been a notable pick up today in warnings that an aggressive Fed will cause serious damage to the US #economy and beyond
It is right to be concerned. But the answer is not for the Fed to allow #inflation to cause more pain to so many
As I’ve 1/2
…detailed before, we find ourselves quite far from the world of policy “first best”—a consequence of the #Fed having been so late in responding
Tragically, especially as this was avoidable, the second- and third-best policy approaches come with side effects and collateral damage
Protecting the most vulnerable segments of society becomes even more important, as does using this moment to enhance productivity, growth and future financial stability. Rather than hope for an immaculate soft landing, it’s crucial to minimize the damage from the policy mistake.
Read 3 tweets
A short monetary history trip to 1967's exploring the exchange between Karl Blessing #Bundesbank, and the then Chairman of the Board of Governors of the US Federal Reserve System #FED, William Martin. Image
...keep reading the juice will be at the end.. Image
Are we there yet?
Here are just some boring footnotes for the record. Juice coming soon in red: Image
Read 7 tweets
DoubleLine CEO Jeffrey Gundlach presents "Rehab."

Tune in Thursday, 9/15/2022 at 1:15 pm PT | 4:15 pm ET.

#macro #markets #commodities #Fed #inflation #growth #rates #stocks #bonds #EM #Europe #USD #FOMC #Powell #recession Image
.@DLineCap CEO Jeffrey Gundlach: I think the U.S. needs to go into rehab
Gundlach: There are 1,250 IRS agents who are not paying taxes. 87,00 new IRS agents coming.
Read 65 tweets
Annual consumer price increases are cumulative. YoY Aug. 2022 #CPI rose 8.3%, but YoY Aug. 2021 CPI rose 5.3%. That means the cost of living is up by 13.6% in just two years. Even if the #Fed reduces Aug. 2023 YoY CPI to 2%, Americans would pay a 15.6% #inflation tax every year.
Actually I forgot about compounding. The actual increase over the two years was 14%.
Plus the correct 3-year increase is 16.3%. But again that is only if #inflation comes down to 2%. It's far more likely the 3-year increase will be 20% -25%!
Read 3 tweets
Tuesday Sep 13 we get the most important economic indicator Aug #CPI that will determine the Fed's action in 2 weeks from now.

In many ways this report is more about core than headline with many fearing core #inflation to persist.

So where will #CPI print at?

A thread.

My estimates:

Headline: -0.4% vs -0.0% prior
Core: +0.1% vs +0.3% prior

Headline: +7.8% vs +8.5% prior
Core: +5.9% vs +5.9% prior

This is lower than both consensus estimates and Cleveland Fed Nowcast (see table).

2/9 Image
My Aug #CPI estimates are 0.3 pp lower MoM and YoY on both headline and core than consensus.

The Fed's estimates are the most aggressive expecting monthly gains on both headline and core.

3/9 Image
Read 9 tweets
Some (among which @MacroAlf and @biancoresearch) suggest the FFR needs to be > YoY #CPI for the #Fed to stop hiking bc this was always the case.

Is that true?

Let's demystify this.

A thread.

One of their (@MacroAlf, @biancoresearch) main assumptions is the #Fed needs to lower #CPI to 2%.

LT #CPI average (1914-present) is 3.3% which is 63%! higher than 2%.

The #Fed prefers core #PCE as a measure of #inflation bc it's generally much less volatile than #CPI.

As repeatedly said, the #Fed targets core #PCE at 2% not #CPI.

Currently #CPI is almost twice as high as core #PCE.

In theory, it's possible for #CPI to be c4% when core #PCE drops to 2% but their gap will likely narrow as both go down towards the end of 2022 and in 2023.

Read 14 tweets
📌FED nedir? FED Faiz Artırırsa Ne Olur?

Amerika Birleşik Devletleri’nin merkez bankası olarak bilinen Federal Rezerv Sistemi (Federal Reserve, FED) ülkenin para politikasını yönetir, ABD mali sisteminde istikrarın sağlanmasında ve sürdürülebilmesinde önemli bir işlev görür. Image
#FED, bilinen anlamda tipik bir merkez bankası kimliğinde değildir. Tam anlamıyla özerk ve kendine özgü, son derece özel bir yapıdadır. Merkezi Washington'da olan bankanın başkanı Jerome Powell'dir.
Banka, talimatı üzerine Bureau of Engraving and Printing tarafından basılan Amerikan dolarının dağıtımı yetkisini elinde bulundurur. ABD’nin para ve maliye politikalarına doğrudan etki etmesinin ötesinde, küresel bağlamda da ülkelerin para ve maliye politikalarını etkilemektedir.
Read 12 tweets
Thread : quel rapport entre productivité et inflation ?

Je répète souvent que la monnaie qui ne sert pas à créer de la richesse génère l'#inflation.

À dérouler...
C'est exactement le cas des politiques monétaires des banques centrales dont la monnaie créée numériquement ne sert qu'à :

- générer des bulles sur les marchés (obligations, actions, immobilier, cryptos, art, luxe, matières premières...)

- favoriser le "quoiqu'il en coûte"
Contrairement à ce que nous vendait les banques centrales, la montagne de monnaie numérique créée par les banques centrales n'a pas servi à financer l'économie réelle, mais a surtout été utile à la spéculation financière et à la dépense publique (non stratégique)
Read 14 tweets
Quoique l'on pense de Poutine, sa vision de l'économie et de la monnaie est limpide et juste
Ça peut paraître provocateur, mais y a du De Gaulle dans ce discours de Poutine
Read 5 tweets
Today’s #JobsReport revealed an #economy that is producing #jobs at a slower pace than it has over the prior several months.
That said, a historic number of jobs have been created in this recovery since the fall of 2020, so a slowing in the pace of #growth isn’t unexpected.
Even with today’s somewhat slower rate of #hiring at 315,000 jobs for the month of August, the 3-month and 6-month average of #payroll gains has been 378,000 and 381,000 jobs, respectively, which is clearly indicative of slowing today from a point of strength.
Read 12 tweets
Majör faizler bir birini tetiklerler. #FED faizi geliyor ama, #ECB de geliyor. Bunların ikisinin birleşmesi sıkıntı çıkarır.

FED bunu takip ediyordur. Yani; ikisi piyasaya zarar verir
bu riski masa da tutarlar.
Geçen ECB faiz artışı olduğun da ABD faizleri
hemen aşağı yapmıştı. Çünkü; yapmazsa ne olur ?
Kavga çıkar piyasalar da..
Bunların dertleri de emtia fiyatları olduğu için,
sürekli baskıdalar.
Emtia olmasın ikisinden birisi çoktan pes ederdi.
Read 4 tweets
I am having fun with this story folks! Probably I should write a comic book about it!
#Russia #Oil #EU #Biden #US #PriceCap Image
The Biden administration and the EU want to put a cap on the price of imported Russian oil.
#Russia #Oil #EU #Biden #US #PriceCap Image
Read 15 tweets
Thread : la main dans le cambouis

Pourquoi les traders pensent plus que les autres que les politiques monétaires des banques centrales ont amplifié la hausse des matières premières via la spéculation ?

Pourquoi les économistes ont du mal à faire ce lien ?

Fil à dérouler...
Un trader est confronté à la réalité du terrain.

Quand j'étais trader dérivés sur actions, pendant la crise de 2008, l'appétit au risque des banques s'est soudainement affaibli. Le capital nécessaire à la prise de risque venait à manquer.
Certains de nos clients devaient couvrir leurs positions. Ils étaient dans une position défensive. C'est le cas des fonds de retraites qui doivent respecter des lignes directrices très strictes concernant leur politique d'investissement.
Read 25 tweets
1) Jackson Hole (2020): #Powell said the #Fed is changing its model to where it will not raise rates in the face of rising #inflation since the job market remains on solid footing. Jackson Hole (2021): With inflation surging to 5%...Powell said inflation will be transitory...🧵
2) and there was no reason for the Fed to raise rates. Jackson Hole (yesterday): After raising rates by the fastest pace in three decades, which caused the housing market to crash in six months, an unpresented drop in services PMI...(clear sign consumer spending is plunging)...
3) major retailers (BBY, WMT, TGT) lowering prices to get massive inventory off their books... half of the companies in the S&P 500 about to announce layoffs (from PwC), nonresidential construction spending at 50 year lows... the MASSIVE contraction in M2 (which was the...
Read 6 tweets
Le patron de la Banque centrale américaine (#Fed), Jerôme #Powell, a mis en garde les américains aujourd'hui :

"La lutte contre l'#inflation aux Etats-Unis "va faire souffrir les ménages et entreprises" américains, mais y renoncer serait encore plus dommageable pour l'économie."
Après plus d'une décennie de création monétaire dont les ultra-riches se sont le plus gavés, le patron de la #Fed explique maintenant que ce sont les ménages et les entreprises qui en paieront le prix douloureux.
Hier encore, j'expliquais que "ceux qui profitent de l'#abondance (monétaire) et ceux qui en payent le prix, ne sont pas les mêmes !"

Aujourd'hui Jérôme Powell vient de confirmer cette analyse !
Read 5 tweets

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