Discover and read the best of Twitter Threads about #Fed

Most recents (24)

1/21 A long thread of local context for Ant Financials’ Credit Scoring Joint Venture and Chinese state ownership. There has been significant recent news of Chinese SOEs taking stakes in private companies. #PBOC #BABA #China #Ant #Didi #ByteDance #Hefei #ZheJiang #Evergrand
2/21 How to make sense of this trend? ONE: the government’s goal is to take enough equity to acquire a seat in the board, bail out a locally troubled company, or pure investment return, not necessarily ownership and control per se.
3/21 Taking state ownership means government needs to pony up significant capital. In BOE Tech deal, Hefei city put in more than $2 billion. It had four more investment deals with >$1 billion. Many numerous deals like PuDao Credit, the Beijing-affiliated SOE put up $52.5million.
Read 22 tweets
🇺🇸August #Jobsreport: "It's a softie"

🟡Payrolls +235k
🤏Private +243k
🤏Goods +40k
🤏Services +203k
🔴Gov -8k


#Unemployment 5.2% (-0.2pt)
🟡Participation rate 61.7% (flat)
✅Wages +0.6%

🔴Job loss vs Feb'20: 5.3mn
⬆️Share regained:76%
The US labor market is exiting the summer with much less momentum then when it entered with only a 235k advance in August

▶️Only 1/3 of 3-month trailing average of 750k
▶️Well short of our under-consensus 675k call
The breadth of job gains in the private sector cooled visibly in August with 62% of industries growing, from 69% in July
Read 14 tweets
1/Thanks to @steve_sedgwick and @cnbcKaren for having me on @CNBC #SquawkBox this morning.

We talked about - what else? - #inflation and #centralbanks and whether the #Fed & peers are 'making an historic mistake', in Steve's words.

A few charts & comments for background:-
2/It's trite to say the jump in price indices is *all* attributable to a 'basis effect' when they've accelerated so much THIS year.
3/ #JeromePowell and his merry band may wish to believe that the rise is a mere blip, but all too many businessmen & women (i.e., the people who *really* matter) seem to believe the converse is the case.
Read 10 tweets
Beyond immediate inflationary pressure and quarterly corporate profits abroad, the counterintuitive shift strengthens producers leverage in the supply-chain as well as creating potential trade/socio-economic instability #uncertainty #Fed #business #dollarindex
Read 4 tweets
It was 73 degrees and sunny in #JacksonHole, Wyoming, today; a perfect day for all those who were there….
Yet, there were no #monetary policy officials present at the traditional location of the @KansasCityFed’s late-summer #economic policy symposium, since they were conducting a “virtual symposium.”
That symposium provided #ChairPowell the opportunity to lay out a reasonably sunny perspective on the U.S. #economy, but also one that was not out of the woods yet, in terms of Covid variant risk and a maximum #employment target still to be achieved.
Read 10 tweets
Short thread on the consequences of picking the next #Fed chair, inspired by this good piece by @chrisjcondon, @StevenTDennis, and @SalehaMohsin.

I agree with the main take, including that Powell "rebuilt bipartisan respect for the Fed." 1/8…
If you look at betting markets, Powell has very high odds of getting renominated. I think 84% is grossly exaggerated because I suspect Sen. Warren et al won't give up easily. But I give him the edge at this point, maybe 60-40. 2/8
.@SecYellen open support a few days ago helps but probably won't seal the deal. Politics still matters, and after all Powell is a Republican nominated by Trump who is perceived by some to be too easy on banks. 3/8…
Read 8 tweets
Why has US inflation been so low, despite super loose monetary policy?

Jul Personal Consumption Expenditures Price Index is at 4%, overshooting Fed's 2% target. This number is attributed to the baseline effect.…
1/ The Fed's playbook is to:

Use super-loose monetary policy to try to push unemployment down

Let inflation overshoot their 2% goal by a bit, for a while
2/ Fed has doubled-downed on its dovish approach by pledging to hold off on changing forward guidance until conditions are met.
Read 4 tweets
Thread ⏰: L’Effondrement de l’Empire Romain par l’effet de la planche à billets et de l’hyperinflation. Une cause essentielle.

Spoil : Nous vivrons un effondrement analogue Image
Jules César crée l’aureus une pièce d’or (8 grammes) et qui était très largement utilisée en Europe et en Méditerranée. Cette monnaie dure a favorisé le commerce et la spécialisation. Une stabilité économique qui a duré 75 ans et limitant les dépenses du gouvernement !!!
(y compris durant des périodes de troubles comme suite à l’assassinat du dictateur) Tout commence à basculer sous le sinistre Néron qui introduit l’écrêtage des pièces. Ce bandit collectait les pièces détenues par la population
Read 13 tweets
Our #inflation forecasts from March on plus the ultimate scare: the possibility of a hyperinflation.

The "shock" was plainly visible in prices of online products and, e.g., shipping 👇. When economies opened, it materialized. 1/4
@GnSEconomics #economy…
By June, it was clearly visible that the source of #inflation had moved from "want to have products" to, e.g., food, rents and fertilizers, that is, to "need to have products", which would be reflected on wages

Alas, inflation was here to stay. 2/…
But, what truly worries us, is the possibility of a very rapid #inflation , or hyperinflation. It's pre-requisites are:

1) Vast issuance of central bank credit, like QE, and
2) Diminution of production possibilities. 3/

Both are here now. 🥶…
Read 4 tweets
Accadde oggi
Era domenica anche 50 anni fa, il 15 agosto 1971 Richard Nixon interruppe la trasmissione del telefilm Bonanza e annunciò al mondo che gli Stati Uniti abbandonavano gli accordi di Bretton Woods, la convertibilità in #oro del #dollaro era sospesa.
E' il segnale di 1/8
“liberi tutti" che divide la storia economica e monetaria del dopoguerra in un “prima” e in un “dopo”, è l’embrione della finanziarizzazione dell’economia: comincia l’era dei cambi flessibili e della volatilità, le divise non sono più sorrette dall’oro ma dalla forza delle 2/8
economie e dalla credibilità dei paesi, il debito diventa il carburante della crescita economica
i 50 anni della ricorrenza vanno ricordati perché i cambi flessibili fanno sentire il “tintinnar di sciabole” delle #guerrevalutarie e i paesi avversari degli USA stanno tentando 3/8
Read 8 tweets
The Psychology of Human Misjudgement - Charlie Munger Full Speech via @YouTube
well, if one can get around the accounting and auditing systems, you can commit fraud on a massive scale.
That is what rogue traders do!
But, financial institutions have invested big time in hiring quants who can write codes and Greek symbols which board members don't comprehend
It's brilliant if your standard fraud risk assessor aka auditor and the quantitative risk manager can use the #Benford #Law to identify, proactively measure and control fraud risk-related predicate financial crimes.
But, first, do the basic work, before leapfrogging.
Read 22 tweets
Inflation data for July moderated somewhat, at least relative to the heady pace of recent months, which should temper #market and policymaker concerns a bit, despite the fact that #inflation will stay sticky-higher for a while and the #risk remains to the high-side.
Core #CPI (excluding volatile food and #energy components) came in at 0.3% month-over-month and 4.3% year-over-year, a bit less than the consensus forecast, and headline CPI data printed at a solid 0.5% month-over-month and came in at 5.4% year-over-year.
While we think that it’s hard to see a case for the recent levels of elevated #inflation turning into “1970s style” runaway price increases, higher #wages and elevated growth for an extended period will allow companies to achieve higher levels of #PricingPower for a time.
Read 7 tweets
What can cause the market to crash 70%+? I've been thinking more and more about this question as almost nobody, except @DaveHcontrarian, thinks it's a possibility.

Important thread⬇️for anyone invested in $BTC $ETH $SPY $QQQ #FANG or any other risk asset.
Let's start off by saying that I am in no way giving advice on what to do to prepare for a potential crash in the markets.

I am only giving my thoughts on what could happen that would lead to a massive correction and how I would not be surprised if it did.
Let's take a step back and look at the current environment:
-> Retail speculation at all time highs, look at any highly leveraged stock with worthless equity and madness going on in #crypto land and #NFTs
-> #liquidity near alltime highs, consumers flush with cash from stimmys
Read 16 tweets
Las cosas en la Fed van mal desde hace tiempo; GFC/Covid son dos aceleradores de inflación.

B/s Fed a 31/12/1981: total activos: $176.850M. Descontado oro/efectivo/divisas, cartera de crédito (activos) queda en 152.780M, de los cuales ~80% son títulos deuda pública EE UU.
Expansión monetaria (grandes números):

- Valor certificados oro: 11.150M
- Pasivos totales: 162.740M

(*) Pirámide creación fiat money (paper promises) s/dinero real 14 a 1.

Si sumamos dinero creado sistema bancario, 444.800M, pirámide sube 39 a 1.

Rothbard (1983) Image
B/s #Fed, 31/12/2020. Same old story. BC es hoy (básicamente) una muleta para financiar a tipos subvencionados el saldo deficitario del Tesoro. Se devalúa el dinero (agresión propiedad), se imposibilita el accountability gobierno, y se erosionan los checks & balances. ImageImage
Read 4 tweets
What is going on in the #treasury market? 10 year treasury just hit 1.13%. Yet my fair value model has it at 1.75% (incorporates Copper/Gold and other ratios - r2 of 90%+) #bonds #yields #YieldCurve ImageImage
This is right as fears of growth slowing down are coming up #jobs #ADP…
Yet, the #ISM Manufacturing PMI is still in a highly expansionary state at 59.1 Image
Read 15 tweets
Great conversation with @MerrillLynch CIO Chris Hyzy, as part of their #MerrillPerspectives event. Some of the topics we discuss follow and the full conversation can be accessed here:…
On the #market lessons stemming from the pandemic, I suggested that- stepping back- while a lot has been thrown at the #economy and markets over the past 30 years, in every case the #policy response has been critical to evaluate in judging the ultimate impact: policy matters!
That said, we think there is an overestimation of the importance of exceedingly low #policy rate levels to the recovery but maintaining the stability and #liquidity of the financing #markets is critical, particularly at the top end of the capital stack.
Read 10 tweets
What did saying the Fed continues to put downward pressure on long end yields via “socializing” money markets mean? Combo of standing 5bps RRP rate (was always zero) & increase of IOER to 15bps. ON repo yield EXCEEDS 3MO bills. #FED #REPO #RRP #SOFR cont… Image
…now MM funds have no incentive to buy bills in the free market due to standing 5bps floor. On the other side w/the IOER ceiling set @ 15bps T1 banks have built in perpetual 5bps arb borrowing @ 10bps in FF market & earning 15bps on IOER. #FED #IOER #EFFR Image
…I also think most would be surprised how strong the interest in RRP has become since the new rate was instituted, as well as just how many counterparties beyond T1 banks have access to the window (see current list)… #FED #REPO #RRP Image
Read 3 tweets
We first warned on the possibility of a 'perfect storm' in December 2017.👇

We envisaged that the "storm" would engulf the global #economy in two years, but noted that everything depends on the actions of #Centralbanks and #China .
As we now know, central banks have been very innovative in postponing the crisis.

The bailout operations effectively started in 2016, when China unleashed a massive 'credit bonanza' to halt the collapse in its housing markets, and a global #recession . 2/…
They continued in December 2018/early January 2019, when the near collapse of the Chinese banking sector and credit markets in the US forced the PBoC to inject hundreds billions worth of liquidity into the banking system and the Fed to 'pivot'. 3/…
Read 14 tweets
Currently, the most important thing, when one wants to understand the behavior and the future of financial markets, is to understand the programs of quantitative easing, or QE.

A short thread. 1/6
@GnSEconomics #inflation #centralbanks #Fed #StockMarket…
They are asset purchase programs of the central banks and they have been running since late 2008 (with the Bank of Japan experimenting such programs from March 2001 till March 2006).

In them the central bank buys (mostly) government bonds, but also corporate debt... 2/
...and sometimes even stocks. They have altered the financial system in a profound and a very dangerous way.

This is a pressing issue now when #inflation has risen markedly, as tapering of QE -programs, where central banks end purchases of new assets, is likely... 3/
Read 6 tweets
Thanks to @steve_sedgwick & @cnbcKaren for having me on #CNBC #SquawkBox this AM.

What did we discuss? Well, #inflation of course!

I prepared some slides for the show which I'm happy to present in this thread.
#macro #Fed #Yellen #JeromePowell #bankofengland #QE
Are people in denial or is the #centralbank money flood just drowning all the signals?
#Commodities, #freight, #carbon - and a whole lot besides - sure do cost a lot more, these days.
Read 14 tweets
Today’s robust #inflation data surprised in its strength and will likely persist in the short-run, and in some areas the intermediate-term, although we think that long-term the @federalreserve is largely correct in identifying real #economy price gains as mostly #transitory.
Much of today’s #inflation is due to reopening factors and supply constraints, but as #SupplyChains normalize from Covid-related shocks and #inventories rebuild, we expect much of the recent inflation will be transitory, with some stickiness in pricing pressure longer-run. Image
That may be especially the case where #inventory levels are harder to build up quickly and continued #demand from higher levels of #growth persist for at least the next year, or so.
Read 9 tweets
Does the #US10Y yield puzzle affect India? An earlier tweet covered the various angles to the US10Y yield puzzle. The perceived softness around #USgrowth appears to stand-out as a prominent reason. During the same time last week, we saw a sharp rise in the Indian 10Y...(1/12)
...yield to 6.18%. This appears to have been on the back of the #RBI's surprising (disappointing for traders/underwriters) choice of picking relatively illiquid papers for its new tranche of G-SAP 2.0. The announcement of a new 10Y benchmark paper auctioned on...(2/12)
...Friday, with a higher traded yield was another reason. Are the US and Indian bond markets related in anyway? The answer is an obvious yes. Given that the US is a key global driver, the #Fed's policy rates naturally push monetary policy of emerging markets and...(3/12)
Read 12 tweets
[#TransitionEnergetique] La question du futur énergétique de la France souffre de raccourcis et de postures partisanes qui desservent l'interêt général. Il est urgent de reposer les bases d'un débat constructif et rationnel 1/7 #Thread #EnR #éolien #CO2…
L'électrification des usages est indispensable pour décarboner à un rythme soutenu la 🇫🇷 (65% de l'énergie conso. est d'origine fossile) ce qui entraînera une hausse de la production électrique : on ne peut plus se passer de solutions élec. bas carbone comme l'#éolien 2/7 #EnR
Pour bien comprendre l'enjeu, nous devons faire travailler aujourd'hui les énergies bas-carbone (#nucléaire et #ENR) ensemble sous peine de différer nos objectifs et/ou relancer des sources de productions fossiles dans les 15 prochaines années ce qui n'est pas acceptable. 3/7
Read 7 tweets
Interesting Paper from @blackrock from June 2019

Relates to the need for monetary policy in coordination with fiscal
#monetarypolicy #fiscalpolicy #Fed #economics
#bitcoin #BTC #inflation…
"An extreme form of “going direct” would be an explicit and permanent monetary financing of a fiscal expansion, or so-called helicopter money. Explicit monetary financing in sufficient size will push up inflation."
"Without explicit boundaries, however, it would undermine institutional credibility and could lead to uncontrolled fiscal spending."
Read 5 tweets

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