Bill Dudley

Jim Bianco Warns "Inflation Is Going To Be A Game Changer"

"Inflation will soon become a main concern for investors... this will change the basic relationship between stocks and bonds and could set up the financial markets for severe turmoil, like in the late 1990s when the collapse of Long-Term Capital Management sent shock waves around the globe."

"Trump Makes America Wait Again" - Why Not Everyone Was Happy With Trump's Address

"Financial bubbles, most notably the dotcom era, have proven that hopes and dreams can keep the market irrational longer than most of us can remain solvent. At some point though, reality catches up. And 40 days in to Trump’s administration, there’s little sign that Trump will deliver much of a boost to the U.S. economy on any imminent horizon."

Global Stocks, US Futures Surge, Bonds Tumble On "Presidential" Trump Speech, Hawkish Fed Speakers

The dollar and U.S. Treasury yields jumped on Wednesday, while global stocks and S&P futures rose as investors gave generally favorable marks to President Donald Trump's first speech to Congress, while paying more attention to the sudden onslaught of Fed hawks who repriced March Fed hike odds from 50% to 80% in a single afternoon. Strong economic data from China and Europe helped propell global risk assets higher.

Here's A Unique Sign Of Inflation

"I remember the first time I ever saw a $100 bill. I was dumbfounded. It was more money than I had ever seen in my young life.... $100 could practically pay the rent in a lot of places back in the 80s. That’s obviously no longer the case...$100 simply isn’t the awe-inspiring symbol of wealth that it used to be. And that’s because of inflation."

The Fallacy Of Central Planning (Exposed By South Park's Underpants Gnomes)

In the 1980s, the Fed decided that economists had learned sufficiently from the grave, global mistakes of the Great Inflation such that they would compensate for the evolution of money by controlling just a single interest rate. It was, essentially, an underpants gnome schematic: "1. Target federal funds rate. 2. .... 3. Control Economy."

Brace Yourself For The Quadrillion-Dollar Reckoning

"...debt is simply everywhere, at least to the extent we can see and measure it. Corporate and sovereign debt, of both the developed world and emerging market varieties, are at record levels. China’s debts certainly add to that record but who really knows to what extent? It’s the ultimate black box of leverage on Planet Earth... You cannot NOT worry about the Fed in this world...The simple truth is ending reinvestment would bring the bond market to its knees.

The U.S. Economy: Bad Moon Rising

As for the incredible realm, one explanation is that the Fed is scared stiff it has nothing left in its toolbox to combat the next recession. Few major downturns have begun with the fed funds rate so perilously close to zero. The ultimate Catch 22 is that the flatness of the yield curve makes any fantasy of a Fed rate hike all too real for a dead breed the world once knew as ‘bond market vigilantes.’ It’s altogether possible that one more hike would be all it takes to invert the yield curve. The rest, as history has never failed to repeat, would be just that – history.

Dear Janet... TED Spread Confirms 'Risk', Not 'Policy' Is Driving Rates

Once again FOMC policy is at odds with what is taking place in deeper and far more intellectually-sound money markets. The TED spread confirms risk not policy as the underlying mechanism, while the eurodollar futures price reveals the growing pessimism about what that could mean for the intermediate and long terms in real economic conditions.

"Several Participants Pointed Out The Elevated Level Of Equity Values"

"... during the discussion, several participants commented on a few developments, including potential overvaluation in the market for CRE, the elevated level of equity values relative to expected earnings, and the incentives for investors to reach for yield in an environment of continued low interest rates."