Fed Funds Target

Wall Street's Take On The Fed Minutes: June, Sept. In Play; BS Unwind May Come Sooner

While the dollar and TSY yields both dropped to session lows shortly after the FOMC announcement hit as traders focused on the Fed disclosure that FOMC voters thought it prudent to await evidence an "economic slowdown is transitory" suggesting the committee still wanted to hike rates but was willing to wait for the certainty of data,  Goldman's disagreed and according to a just released assessment by Goldman's Jan Hatzius, the statement was more hawkish than perceived by the market.

The Scariest Forecast For Treasury Bulls

Assuming Deutsche Bank is correct, the result would be the scariest forecast bond bulls have seen in years: a 10-Year TSY whose yield fades all gains attained during the past decade, in the span of just two short years, hitting 4.5% in early 2019. The adverse implications from such a fast, steep move on all asset classes, not just bonds, would be devastating.

Financial Time Bombs Hiding In Plain Sight

The bear will soon be arriving in earnest, marauding through the canyons of Wall Street while red in tooth and claw. Our monetary central planners, of course, will once again - for the third time this century - be utterly shocked and unprepared. That’s because they have spent the better part of two decades deforming, distorting, denuding and destroying what were once serviceably free financial markets. Yet they remain as clueless as ever about the financial time bombs this inexorably fosters.

The Mechanics Of NIRP: How The Fed Will Bring Negative Rates To The U.S.

Now that talking about NIRP in the US is no longer anathema but a matter of survival for market participants for whom frontrunning the Fed's policy failure has emerged as a prerequisite trade, the question is: what are the mechanics of NIRP, what are the implications of negative rates for US markets. Here is the handy answer

A "Witch's Brew" Bubbling In Bond ETFs

We believe the Credit Cycle has turned and with it will come some massive unexpected shocks. One of these will be the fall out in the Bond Market, centered around the dramatic growth explosion in Bond ETFs coupled with the post financial crisis regulatory changes that effectively removed banks from making markets in corporate bonds.  It is a ‘Witch’s Brew’ with a flattening yield curve bringing it to a boil.

October Case-Shiller Home Prices Soar Most Since March

While it is two months delayed (and home sales have tumbled since), Case-Shiller reports that home prices rose 0.84% MoM in October, beating expectations and the biggest monthly rise since March. While the YoY gains barely missed expectations at +5.54%, Miami, Tampa, and San Francisco all saw the biggest gains as Chicago, Cleveland, and San Diego saw the biggest drops in home prices.