Tweet

Brian Chappatta

Follow @BChappatta

5 Jan, 10 tweets, 3 min read

~feels~ like the FOMC minutes due in 2 mins could be among the most market-moving of the past 2 years

I have the 5-year yield up on my screen, which is already starting to move a bit in anticipation

Here are the December FOMC minutes:

federalreserve.gov/monetarypolicy…

*FED IN DECEMBER DIDN'T SEE OMICRON ALTERING PATH OF RECOVERY
*FOMC MINUTES: PARTICIPANTS SAW SUPPLY ISSUES LASTING LONGER

Exactly the two things I wrote about yesterday in my column:

bloomberg.com/opinion/articl…

"Almost all participants" agreed to start balance-sheet runoff after the first rate hike. So the Waller Plan for 2022 is still in play.

March: Hike
June: B/S runoff begins
Sept: Hike
Dec: Hike

5-year Treasuries moving big time on that other sentence in that paragraph, which led to this headline:

*FED MINUTES FLAG CHANCE OF EARLIER, FASTER RATE HIKES

10-year Treasury yield is at the highest since May

Oh??

“Removing policy accommodation by relying more on balance sheet reduction and less on increases in the policy rate could help limit yield curve flattening during policy normalization.”

You don't say!

bloomberg.com/opinion/articl…

stocks are gonna have to throw a much bigger fit than this to knock the Fed off course

and, scene.

*MARKET-IMPLIED ODDS OF MARCH FED HIKE REACH 80% AFTER MINUTES

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @BChappatta

Brian Chappatta

@BChappatta

7 Jan

I'VE SEEN ENOUGH.

Don't usually try to predict the Fed's exact moves, but this jobs report, combined with next week's inflation data that's expected to show 7.1% CPI and 5.4% core, will lead the Fed to prime markets for a March rate hike at this month's meeting.

https://twitter.com/RenMacLLC/status/1479446380099903488

I had written "green light" for March initially, but a certain someone beat me to the punch. 👁️

https://twitter.com/RenMacLLC/status/1479446380099903488

and now, this:

*U.S. 10-YEAR YIELD RISES TO 1.778%, HIGHEST SINCE JANUARY 2020

Read 4 tweets

Brian Chappatta

@BChappatta

7 Jan

another potentially weird jobs report from the looks of it

*U.S. DEC. PAYROLLS INCREASE 199,000; EST. 450,000

but

*U.S. DEC. UNEMPLOYMENT RATE FALLS TO 3.9% VS 4.2%

Also worth noting that average hourly earnings had a SOLID beat.

+0.6% m/m, compared with estimates for +0.4%
+4.7% y/y, compared with estimates for +4.2%

ECI, which Powell singled out as a crucial data point, is coming at the end of the month.

Now we're cookin'

5-year yields just topped 1.5%

Read 4 tweets

Brian Chappatta

@BChappatta

12 May 21

*U.S. APRIL CONSUMER PRICES INCREASE 0.8% M/M; EST. 0.2%

https://twitter.com/conorsen/status/1392457928414744578

TRANSITory

I'll see myself out.

https://twitter.com/conorsen/status/1392457928414744578

To recap:

Headline CPI: 4.2% y/y (highest since 2008), 0.8% m/m (highest since 2009)

Core CPI: 3% y/y (highest since 1996!!!), 0.9% m/m (highest since 1982!!!!!)

It's worth parsing the data, but there's no denying these are some big numbers.

Read 4 tweets

Brian Chappatta

@BChappatta

24 Mar 21

Yellen points to the drop in U.S. interest payments as a percentage of GDP as a reason that she still sees fiscal space, though notes "it certainly doesn't mean that anything goes."

"Longer-run, we do have to raise revenue to support permanent spending that we want to do."

Oh wow we just got a question on the significance of 2s10s hitting 160 basis points. Going mainstream!

Uh oh, Senator Elizabeth Warren is going after BlackRock.

Read 9 tweets

Brian Chappatta

@BChappatta

23 Mar 21

YELLEN: "In fact, I think we may see a return to full employment next year."

POWELL: "Our best view is that the effect on inflation will neither be particularly large nor persistent."

Janet Yellen getting her first round of combative questions from Republican congresswoman Ann Wagner.

Also asked Powell about "obvious inflationary pressures," citing lumber and gasoline prices.

Read 8 tweets

Brian Chappatta

@BChappatta

31 Dec 20

If 2020 has taught investors one thing, it’s that the Fed is all-powerful.

Except in fighting wealth inequality. A thread:

bloomberg.com/opinion/articl…

At its core, the Fed sets the level of interest rates in the economy.

Low rates (now) = higher prices for stocks and risky assets = the wealthiest profit

Higher rates (circa 2018) = higher U.S. Treasury yields = those who can afford to save the most (i.e. the wealthy) profit

In other words, as long as you have a sizable amount of money to begin with, monetary policy on its own is a win-win.

It’s tempting to paint the Fed as a villain always looking out for Wall Street. In reality, higher rates and tighter policy are hardly a great wealth equalizer.

Read 15 tweets

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Share this page!

Brian Chappatta

Try unrolling a thread yourself!

More from @BChappatta

Brian Chappatta

Brian Chappatta

Brian Chappatta

Brian Chappatta

Brian Chappatta

Brian Chappatta

Did Thread Reader help you today?

Like this author's thread?