Discover and read the best of Twitter Threads about #FOMC

Most recents (24)

Many questions surrounding the Fed's Reverse Repurchase Agreement ( #RRP ). The ability to raise rates and address inflation has little to do with the #FOMC announcement every 6 weeks and more to do with this program. As one can see almost $2 #trillion is in this program.
As Paul Harvey would say, here is "the rest of the story" Could the #RRP been designed to stop Treasury-Bill ( T-bill ) rates from going negative or keep upward pressure on yields due to a shortage of available t-bills.
Basically having RRP as another form of savings, this removes the normal market pressure of excess funds from T-bill paydowns seeking fewer and fewer T-bills (keeping rates artificially lower).
Read 5 tweets
Powell was asked today if he thinks the market is losing credibility in the Fed's monetary policy.

His answer was simple but useful to understand the relationship between Treasury yields and interest rates:
The Two Year Treasury yield rose from 0.53% on November 30th to 2.65% now.

Powell announced in Q4 2021 that interest rate hikes were coming.

The Treasury market took Powell's words as guidance and yields began to climb before interest rates were actually raised.
The Fed Funds Rate currently has a range of just 0.75-1%, but the 2Yr Treasury is much higher at 2.65% since the market expects that the Fed Funds Rate will continue to rise over the next two years.

Essentially, treasury yields rose as interest rate expectations rose.
Read 4 tweets
As was widely expected, the @federalreserve’s Federal Open Market Committee raised the target range for the Federal Funds #policy rate by 50 basis points (bps), to between 0.75% and 1.0%, and announced the start of #runoff of the central bank’s balance sheet.
As previously suggested by the #Fed’s March minutes, the pace of runoff was confirmed today as $95 billion/month ($60 billion in U.S. #Treasuries and $35 billion in Agency #MBS, with a three-month phase-in period.
Also as expected, the statement reiterated that the #FOMC “anticipates that ongoing increases in the target range will be appropriate,” underscoring the seriousness of #Fed policymakers in getting #inflation and inflation expectations under control.
Read 16 tweets
#FOMC statement thread:

The Federal Open Market Committee voted to increase the federal funds rate by 50 basis points at the conclusion of their May 3–4 meeting, consistent with expectations, with the current range being 0.75 to 1.00 percent.
“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.” The Fed also notes that Russian invasion in Ukraine and COVID-19-related closures in China exacerbate pricing, supply chain problems.
The FOMC’s moves are meant to cool inflationary pressures in the economy, and it is widely anticipated that the Federal Reserve will hike interest rates by another 50 basis points at its upcoming June 14–15 meeting, with additional increases forthcoming at later meetings.
Read 7 tweets
LIVE NOTES: Powell speaks at the FOMC Press Conference.

The Fed will be hiking interest rates by 50bps.
Balance sheet run-off will begin on June 1st.

We will be adding updates to this thread live as we watch the Press Conference!

#FOMC #FederalReserve #Fed #Powell
You can view Powell's discussion live through this link:
Balance Sheet Run-Off (QT): The Fed will not be reinvesting coupons and principal payments on the bonds it own.

As the bonds mature, these will run-off and effectively shrink their balance sheet.
Read 25 tweets
As the FED @federalreserve searches for candidates to fill Fed Governor positions, their team is ranking new candidates on 4 categories: 1. Economics 2.Financial Markets/Banking 3.Leadership 4.Diversity. They recently had one open position down to a handful 1/4
candidates whereby they were then ranked on the new system. The Fed kills any candidates who fail the “diversity” category regardless of their capacity to understand, govern, and overall merit. The FED is the single most important economic 2/4
Institution in the world. Given the inflationary mess the US and the world face today, walking away from the absolute top candidates due to the diversity issue is incredibly short-sighted and doing our country and the world a major disservice in our time of extreme need. 3/4
Read 5 tweets
Global Macro Review - 4/10/2022


The 💦🍋 has begun as the #FOMC drains the 👊🥣

And they are coming after YOU dear investor

"'The Fed needs to 'inflict more losses' on the stock market in order to rein in soaring inflation.’”

Let’s dig into the 🧮!

Realizing the Fed bid is no more, bonds headed for the ⛰️⛰️

10/2s steepened ↗️ to 18.6 BPS from #inversion the week earlier

MOVE 125.96 🛗🔺

Chart: $TNX with a new cycle high 2.72% - there’s no reason this cannot go to 5-6%

Bond ETFs go 'no bid' as the 🐻🐻 continue to roam

$TLT -5.5% (w) -12.05% (T) = 3 mos
$BNDD -5.45% (w) -2.2% (T)
$LQD -3.2% (w) -9.65% (T)
$HYG -2.1% (w) -6.55% (T)
$TIP -1.2% (w) -3.65% (T)
$IVOL +1.6% (w) -3.75% (T) ⬅️

Chart: Despite #inflation, $TIP no place to hide
Read 17 tweets
A Thread 🧵 on Yield Spread.


The U.S. Treasury yield spread is the difference between the Fed's short-term borrowing rate and the rate on longer-term U.S. Treasury notes.

The width of the yield spread helps to predict the state of the economy over the course of the next year.

Investors analyze the shape of the yield curve and the changes to its shape to gain a sense of economic expectations.

Read 22 tweets
Today minutes of March meeting of Federal reserve will be released which are expected to provide fresh details on its plans to reduce its bond holdings.

Next FOMC meeting is May. First week, May 3 - 4.

@JustPunforfun @564pankaj @tradeninvestor @virtual_kg

Hike of 0.5% in May, June and July expected along with rapid runoff of $9 Trillion balance sheet.

That is why 10Y bond yields are going crazy.

In a recent paper Harvard University's Larry Summers noted that since 1955 there has never been a time when wage growth exceeded 5% and the unemployment rate was below 5% that was not followed within two years by a recession.

Read 5 tweets
Hello 🐫 day!

As if the relentless ↗️ in yields was not enough, #Brainard reminded participants that the #FOMC is hell bent on removing the 👊🥣

What 🐫 lurks today?

Let's dig into the 🧮!
🪦 🧹 in China is over and Asia closed ↘️

$NIKK 27350 -1.6%
$SSEC 3284 unch
$TWII 17522 -0.6%
$HSI 22016 -2.15% 🐫
$KOSPI 2735 -0.9%
$IDX 7104 -0.6%

Australia ↘️
$ASX 7490 -0.5%

India ↘️
$BSE 59666 -0.85%
Europe opens ↘️ for a 2nd day 🐫

$DAX 14211 -1.5%
$FTSE 7565 -0.6%
$CAC 6559 -1.3%
$AEX 726 -1.35%
$IBEX 8534 -1.05%
$MIB 24552 -1.65%
$SMI 12326 -0.4%
$MOEX 2668 +0.2% ⬅️🪆

$VSTOXX 29.16 🔺
Read 11 tweets
April 6 the minutes to the March 16 #FOMC Meeting will be released.

Those minutes will provide us with the roadmap the Federal Reserve plans to reduce it’s mammoth balance sheet. They hope to achieve a reduction of ~$3 trillion over 3 years.
They are expected to start with reductions of about $80b per month in Treasury bonds and MBS to roll off the balance sheet. They hope that the reductions will proceed without a lot of attention. They are expected to announce reductions at the May meeting.
They are also expected to raise rate by a 0.5% at the May meeting. The focus will shift quickly to whether they raise another 0.5% in June. Watch for the hawkish tenor of meeting participants.

This tightening cycle will be the fastest since 1994, if not faster, off a lower base
Read 11 tweets
Hello #OPEX Friday!

Week to Date:

$AUD +1.15%
$USD -1.17%
$GOLD -2.1%
$SILVER -2.1%

$HSI +4.6%
$CAC +5.65%
$NIKK +5.9%
$COMPQ +6.0%

$COPPER +1.65%
$WHEAT -0.1%
$WTIC -7.0%

$TLT -2.3%

Let's dig into the 🧮!
Asia finished the week ↗️

$NIKK 26827 +0.65%
$SSEC 3251 +1.1%
$TWII 17457 +0.05%
$HSI 21464 -0.15%
$KOSPI 2707 +0.45%
$IDX 6955 -0.15%

Australia ↗️♉️
$ASX 7294 +0.6%

India ↔️
$BSE closed for Holi
Europe under pressure ↘️ at the open

$DAX 14317 -0.5%
$FTSE 7361 -0.3%
$CAC 6569 -0.65%
$AEX 707 -0.1%
$IBEX 8411 unch
$MIB 24182 +0.25%
$SMI 12033 -0.25%
$MOEX closed for 💥🪆

$VSTOXX 32.02 🔻
Read 11 tweets
Hello St. Patrick's Day! 🍀🍀

Emerging market equities, commodities, and currencies are 🍻 the 🕊️🕊️ that are PE Powell and the #FOMC

Let #inflation 🏃

Let's dig into the 🧮!
Asia 🚀 for a 2nd day 🍀🍀

$NIKK 26653 +3.45%
$SSEC 32115 +1.4%
$TWII 17448 +3.0%
$HSI 21501 +7.05% ⬅️
$KOSPI 2695 +1.35%
$IDX 6964 -0.4%

Australia ↗️🍀
$ASX 8251 +1.05%

India ↗️🍀
$BSE 57954 +2.0%
Europe a little more subdued but mostly ↗️

$DAX 14410 -0.2%
$FTSE 7305 +0.15%
$CAC 6596 +0.1%
$AEX 707 +0.45%
$IBEX 6410 +0.45%
$MIB 24222 -0.2%
$SMI 11940 +0.35%
$MOEX 🪆💥

$VSTOXX 36.01 🔻🍀
Read 11 tweets
The two day #FOMC meeting begins today. Here's what I'm expecting:

1) A 25bps rate hike. Powell said as much 2 weeks ago and markets are pricing 100% of such.

2) Increase in 2022 dots to median 5 hikes from 3 previously. 7 hikes currently priced in.

3) Increase in 2023 dots to median 2.125, or 8 hikes cumulatively.

4) Small increase in longer run dots, but not enough to change the 2.5% median.

5) Powell at his presser to emphasize unity of decision to hike 25bps despite Bullard's mouthiness.

6) Powell at his presser to emphasize the need to respond to inflation numbers likely keep pricing of 50% of 25bps / 50% chance of 50bps at May meeting.

Read 4 tweets
Credit conditions are tightening, in part because the Fed has decided to raise rates. Also, economic prospects are deteriorating outside of the Fed decisions in response to war and pandemic. Makes the Fed’s job of calibrating its reaction function - yet undefined - harder.
This is a good time to remember that participants in the #FOMC meeting submitted their forecasts on economy, rate hikes and what the terminal rate should be, before the meeting. @federalreserve Powell will provide import context for how discussion shifted during meeting.
Expect more caution on wide range on uncertainty due China closures and war. The Fed consensus going into meeting was that pandemic and variants more inflationary that destructive to demand. Labor market held up through Omicron wave, although wages slowed.
Read 5 tweets
Hello Monday!

Big week

Not only are the Ides upon us, but we have both #FOMC and #OPEX to process.

Let's dig into the 🧮!
Mixed 👜 in Asia as 🇨🇳 and 🇭🇰 🔒 ↘️ 🦠

$NIKK 25308 +0.6%
$SSEC 3224 -2.6% 🇨🇳
$TWII 17263 unch
$HSI 19541 -4.95% 🇭🇰
$KOSPI 2646 -0.6%
$IDX 6952 +0.45%

Australia ↗️
$ASX 7149 +1.2%

India ↗️
$BSE 59215 +1.2%
Europe opens with a ↗️ bias

$DAX 13872 +1.8%
$FTSE 7150 -0.05%
$CAC 6288 +0.45%
$AEX 672 -0.45%
$IBEX 8264 +1.5%
$MIB 23313 +1.2%
$SMI 11517 +0.2%
$MOEX closed for 💥🪆
Read 11 tweets
Global Macro Review 02/27/22


With 🪆 event risk behind us, equities were able to find relief 😅

But with #FOMC into the #ides in advance of quarterly #opex, vol 🌊 is expected to remain 🛗

Under reported: #PCE +6.1% y/y ↗️

Let’s dig into the 🧮!

War 💥 broke out and equity volatility 🌊 actually came in on the week but remains 🛗

$VIX 27.59 🔻
$RVX 33.20 🔻
$VXN 31.19 🔻
$VXEEM 28.17 🔺
$VSTOXX 32.12 🔺

Chart: $RVX retreated from the F 🪣
© @Hedgeye Image

🇺🇸 equities ↗️ on the week but remain 🐻 Trend
(T = 3 months)

$IWM +1.52% (w) -9.1% (T)
$COMPQ +1.08% (w) -11.6% (T)
$SPX +0.82% (w) -4.57% (T)

Chart: $IWM - small caps continue to outperform +3.71% over trade duration (t) = 1 month Image
Read 14 tweets
🇺🇸 #FOMC (1) | Statement and other releases were mostly in line with Street expectations, which had been looking for signal to lay groundwork for March liftoff.
🇺🇸 #FOMC (2) | However, at press conference, #Fed Powell tried his best to send hawkish signals.
🇺🇸 #FOMC (3) | Powell press conference was clearly more aggressive than the statement, suggesting that he could be more on the hawkish side of the committee.
Read 12 tweets
1. Fed gives a surprise. No rate hike this time. Most likely in March. That calls for a 'small' party. Especially in tech names.
IT took support and bounced somewhat from a very critical zone. Expect some decent pullback here now.

#Markets #Fed #FOMC
2. Rate sensitives like Autos and Real estate should now lead the rally.

If dollar index takes a beating now, you will see Steel and metals also making a strong come back. All in all, Risk is on for next few days.

Baki budget me Sita maiyya naye taxes bas na lagaye...

3. However, the issues for further pressure on the market remains. Once budget is out of the way, there is good possibility market again gets into decent pressure for sometime. Better to take profits in the upcoming rally...
Read 7 tweets

Global Macro Review 01/23/2022


US equity distribution ↘️ continued with a vengeance into Friday’s #OPEX

VIX ↗️ to ~30 ahead of Wednesday’s #FOMC event risk, leading to vol backwardation - a SHORT-TERM ♉️ signal

Let’s dig into the week's 🧮!

High correlation between the UST2Y crossing the 1.0% Rubicon on Tuesday night’s open and acceleration ↘️ in US equity markets

How pathetic is it that the equity market cannot tolerate a 1% 2Y?


Nonetheless, $TNX turned on a dime Wednesday leading to a further flattering of the yield curve with 10/s to 75.5 BPS -36% over the past 3 months (T = Trend) and 30/5s to 51.3 BPS -41% over T duration.

Chart: TNX daily
Read 14 tweets
Hello Friday!

Another ⬆️⬇️ week

$BTC +1.78%
$GOLD +1.34%
$USD -0.99%

$TLT +1.42%

$HSI +3.99%
$SPX -0.38%
$COMPQ -0.85%
$SKEW -4.32%

$WTIC +4.08%
$COPPER +3.08%
$WHEAT -1.55%
$CRB +2.10%

Let's dig into the 🧮!
More selling in Asia ↘️

$NIKK 28124 -1.3%
$SSEC 3521 -0.95%
$TWII 18403 -0.2%
$HSI 24383 -0.2%
$KOSPI 2922 -1.35%
$IDX 6693 +0.55% ⬅️

Australia ↘️
$AORD 7394 -1.1%

India ↘️
$BSE 61183 -0.1%
European bourses under pressure ↘️

$DAX 15963 -0.45%
$FTSE 7560 -0.05%
$CAC 7160 -0.55%
$AEX 788 -0.45%
$IBEX 8765 -0.6%
$SMI 12580 -0.3%
$MOEX 3602 -2.0% ⬅️🪆

$VSTOXX 18.46
Read 11 tweets
Hello Thursday!

Is #CPI 7% really 🏔️ inflation?

Only if the #FOMC really means action to drain the 👊🥣

And the $USD -0.7% yesterday does not believe it.
That's a problem, folks.

Let's dig into the 🧮!
Asia closed mostly ↘️

$NIKK 28489 -0.95% 🪚
$SSEC 3555 -1.15%
$TWII 18436 +0.35% ⬅️
$HSI 24439 +0.1%
$KOSPI 2962 -0.35%
$IDX6658 +0.15%

Australia ↗️
$ASX 7474 +0.5%

India ↔️
$BSE 61161 unch
Europe ↔️ at the open after $FEZ +1.05%

$DAX 15988 -0.15%
$FTSE 7547 -0.05%
$CAC 7206 -0.45%
$AEX 792 +0.25%
$MIB 27766 +0.2%
$SMI 12623 -0.35%
$MOEX 3805 -0.65% 🪆

$VSTOXX 18.30 🔻
Read 11 tweets
DoubleLine founder and CEO Jeffrey Gundlach presents:

Just Markets 2022 - I Feel Young Again

Today at 1:15pm PT, register here:…

#macro #markets #stocks #FX #bonds #commodities #rates #inflation #Fed #QE #bitcoin

Live recap thread⬇️
Jeffrey Gundlach: 2021 might end up running 7% year on the CPI

#inflation #QE #Powell #fed #hikes #rates
Jeffrey Gundlach: Low interest rates coupled with inflation generating negative interest rate.

#JustMarkets2022 #CPI #QE #Fed
Read 48 tweets
Hello Monday!

#Inflation remains front and center as we begin the week with #CPI, Powell Testimony, and 10-year note auction all on tap for Wednesday.

Let's dig into the 🧮!
Asia closed mostly ↗️

$NIKK holiday
$SSEC 3594 +0.4%
$TWII 18239 +0.4%
$HSI 23747 +1.1%
$KOSPI 2927 -0.95% ⏪
$IDX 6991 -0.15%

Australia ↔️
$ASX 7447 -0.1%

India ↗️
$BSE 60290 +0.9%
Europe opens mostly ↘️

$DAX 15917 -0.2%
$FTSE 7448 -0.1%
$CAC 7211 -0.1%
$AEX 786 -0.35%
$IBEX 8738 -0.15%
$MIB 27670 +0.2%
$SMI 12757 -0.3% ⏪
$MOEX 3801 +0.75% 🪆
Read 11 tweets

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