BoE's MPC Scenario Guidance Will Become a Chaotic Puzzle
Scenario guidance is going to take some getting used to. Especially when the BoE gets hold of it, and each member of the MPC sets out their own different scenarios (3 scenarios each, 9 members) 🤣
Oil Prices Slip Despite Months-Long Supply Recovery
By now, everyone knows it will take months for oil supplies to recover from this fiasco. And yet the oil price dropped pretty sharply on today's fake TACO. That seems significant to me...maybe, if we get a proper resolution, markets...
1990 Fed Warned of Dollar Risk After Kuwait Invasion
funny how things change. This is how Fed staff assessed the risks to dollar after Iraq invaded Kuwait in 1990 https://t.co/XydwiGbPI5
US Oil Use Hits Record Low Amid Global Supply Shock
its the "biggest ever shock to global oil supply", as people keep pointing out, but the US economy is also less oil-intensive than it has ever been.. https://t.co/zk9SxpcEA5
ECB's Caution Highlights BoE's Bold Move
its funny (to me) that the ECB obviously looked at the BoE statement today and thought "OK, lets not do anything THAT crazy". The BoE... making the ECB seem sensible
UK's Weak Economy Meets Hawkish Bank, Outlook Grim
The UK has managed to combine the weakest economy with the most hawkish central bank. Bound to end well
Powell’s Tepid Stance on Energy Prices Delays Rate Cuts
the significant part is Powell's relatively lukewarm support for looking through energy prices. 5 years of missing their target is clearly bothering them. They are gonna need to see genuine economic weakness to cut again
1990 Payroll Drop Preceded Oil Shock, Delayed Fed Cuts
Surprised more people arent talking about 1990. Payrolls contracted in the month before the surge in oil prices, which tipped the economy more forcefully into recession. Fed couldn't respond sufficiently, delaying its cutting cycle for 6 months, until energy prices...
Refinancing Wall: An Ever-Present Market Reality
Is there ever NOT a "refinancing wall"? Feel like I've been seeing charts like that for 20 years...
Worker Power Drives Inflation, Now Workers Lose Edge
inflation is about power. In the 70s, workers had the power to resist the oil squeeze. In 2022, there were acute labour shortages, which produced temporary pockets of worker "power". Today, workers are gonna get hosed
ECB Will Likely Misstep on Energy Price Policies
never bet against the ECB doing the wrong thing, particularly when energy prices are involved
Prolonged Hikes Risk Pushing Economy Into Recession
put it this way, if this situation last long enough for central banks to hike, they'll end up hiking into a recession
Labor Market Risk Outweighs Inflation Concerns This Cycle
There is a lot of chat about whether this will be "as bad" as 2022. From inflationary pov, unlikely. And CBs shouldn't be too worried about wage-price spirals, despite the endless overshoot. But my worry is that it tips labour...
Central Banks Miss Inflation Targets Five Years, War Delays Cuts
Central banks have overshot their inflation targets for FIVE YEARS. This war threatens to make that six. If you think they are just gonna cut rates anyway, I dunno what to tell you. Minimum - rate cuts are postponed.
Oil Spikes Signal Cycle End: Income Squeeze, Fed Reaction?
an old debate. Oil-price spikes have a nasty habit of marking the end of the cycle. But is that because of the income-squeeze, or the Fed's response? Or both? https://t.co/IE8tGIRy68
US Economy Stays Strong Amid Policy Chaos, Future Uncertain
The US economy has been surprisingly resilient in the face of so much policy chaos. But you have to wonder whether that can continue, if the f***wittery just never stops
Markets Price Rate Hikes as Cutting Cycle Ends
Cutting cycle is over, apparently - and markets starting to price hikes. Except for the Fed because, you know, he did *promise*...... https://t.co/rJQHqLdaJj
Europe Faces Inflation Shock Twice US Level
Right now, Europe is looking at an inflation shock roughly double that of the US ~ 2%pts
Wider Term Premia Needed to Hedge Bond‑equity Shocks
Term premia should reflect the hedging qualities of government bonds. If we are going to keep getting negative supply shocks - which reduce equities and raise yields, creating a positive return correlation - term premia need to be a lot...
IMF Confirms US Fiscal Boost Exceeds Estimates
People keep telling me I'm wrong about the US fiscal boost this year, but the IMF just published this.. thats bigger than our estimates btw https://t.co/HKAuw6DenI