EconMatters's blog

An interesting dynamic taking place in financial markets on Thursday as Gold saw some substantial buying interest up $22 to the $1295 an ounce area. 

Yellen has got to be the most dovish Fed chairperson going into the most important policy initiative withdrawal phase ever to be recorded since the inception of the Federal Reserve! 

There has been a lot of money made by being patient waiting for the events to play out, and then coming in and shorting the Oil Markets the last five years.

You can ignore and even downplay for a while, but eventually and as sure as the fundamental law of nature that everything has a cost....

We believe Jeffrey Gundlach, et al. are wrong regarding the 10-Year Bond yield staying below 2.80% over the second half of the year.

One major factor to the slow growth/low inflation in the U.S. is the Wall Street Yield Trade.  By incentivizing unproductive use of capital, low interest rate via monetary policy is actually deflationary.

Have you become conditioned to always see the negative at the expense of missing the bigger picture? 

China is unlikely to show weakness losing face in front of the international community, while it is too late in the game for Vietnam or even the U.S. to back out of the situation.

The interesting part is how the Econ Data and Central Bank events for the next three weeks all directly affect the next event, and how the market digests all these events as a whole.

It is very apparent the Fed literally are making policy up as they go along and Wall Street doesn`t realize that the Fed has no exit strategy.  The learning curve is going to be painful as always for Bond Holders.

Despite all the doom and gloom in the market, we would have loved to have these employment numbers three years ago.

Since so many people are still slightly confused about how all the pieces come together in this move lower in yields, we feel the need to add some follow-up commentary. 

There has been a lot on bond buying in Europe and that enthusiasm has transferred over to the US in anticipation of Draghi's massive bond buying stimulus program similar to that of the U.S. Fed.

Our response to a question asked by CNBC-- “Why if everybody is talking about inflation is the bond market not moving?

With much hotter CPI & PPI reports the last two months, we anticipate the May reports before Fed's June meeting to be on the high side, and that the Fed will probably have to address these new inflation pressures....