Bank Indonesia Set to Raise Rates Amid Rising Global Yields
Bank Indonesia to hike next week. IDR will need help with global rise in yields.
Rising US 30‑yr Yield Forces EMs to Boost Risk Premiums
Good morning, US Treasury 30-yr yield is now 5.06%. That's globally consequential, especially on the back of JGB yields rising too. Now, if you are an EM that has a current account deficit and need capital account surplus to offset, you should...
Rising Rates Across Curve Pose Major Macro Threat
Rates are moving to new highs across the curve. Rates moving higher is my biggest macro concern. Written a lot about it. https://t.co/s8dO9I94jX
Margin Debt Matters as Inflation‑adjusted % of GDP
Why bother pronouncing that margin debt has hit $1.3T in isolation? As my great friend @Adam__Josephson demonstrates w/this graph, it’s all about critical contextualization, on an inflation-adjusted basis, as a percentage of GDP. NOW you know what really matters. cc @pboockvar...
US Trade Inflation Hits Highest Since 2022, Fuel Drives Surge
The US import and export inflation data for April crossed the wires this morning. Biggest monthly increase in both since March 2022 - the initial charge of the global pandemic. Naturally, heavily fuel imports (+16.3%) and non-fuel only +0.8% https://t.co/V7WhLVHyIY
Inversion Signals Recession, yet Fed‑driven, Not Deflationary
10Y Treasury Yield−3M Treasury Bill Yield A deep inversion followed by re-steepening has historically been one of the best recession warning signals. But this cycle was driven primarily by extreme short-rate tightening from the Fed, not by a collapse in long-term inflation...
Fed Speakers Dominate Thursday Amid Soft Retail Data
Economic Calendar for Thurs. May 14 8:30am - Retail sales m/m for April: Expected 0.5%; Prior 1.7% - Initial jobless claims: Expected 205k; Prior 200k - Import prices m/m for April: Expected 1%; Prior 0.8% - Export prices m/m for April: Expected 1.1%; Prior 1.6% 10:00 - Business inventories m/m...
Treasury Sells $25bn 30-Year Bonds at 5.0% Yield
From the Financial Times: "The Treasury department issued $25bn of new 30-year bonds on Wednesday, with the high yield at auction reaching 5.046 per cent." #economy #markets #debt #bonds #ust @financialtimes
Fed Quietly Resumed QE, Adding $200B to Balance Sheet
An under appreciated regime change is that the Federal Reserve quietly restarted Quantitative Easing (QE) in December by expanding its balance sheet. The Fed accumulates bonds, soaking up bonds that would otherwise go to the open market reducing money supply. ~$200B increase...
U.S. Job Market Remains Inflationary as Wage Growth Accelerates
New at THE OVERSHOOT: The U.S. Job Market is (Still) Inflationary https://t.co/KpTd2X6fNG Wage growth is now accelerating slightly, supporting the quickening of "supercore" service price increases. Plus: more on the health care wage slowdown mystery. https://t.co/pBeutaTLhh
Tariffs: Revenue Tool and Self‑Sufficiency Strategy
While there’s a lot being written about the Supreme Court decisions on tariffs, I wanted to take a moment to step back and clearly lay out my thoughts on them. Many people think of tariffs as purely disruptive, but throughout history,...
New Fed Chair Spurs Historically Stable S&P Rally
Kevin Warsh confirmed as Fed Chair in a tight 54–45 vote, the narrowest ever. S&P 500 on average, tops on day 33 and bottoms on day 76 after a new Chair. 3 month median max drawdown was just 2.13%.
Over 20% of U.S. Taxes Fund Debt Interest
My take on @wealthion on the EXPLODING US NATIONAL DEBT: "22.2% of American taxes are siphoned off to pay interest on the government’s debt. They don't go to income transfer payments, gov't services, or subsidies." INTEREST ON DEBT = PAYING TAXES AND...
Warsh Confirmed as Fed Chair Amid Inflation Surge
Kevin Warsh has just been confirmed by the Senate to become the next Chairman of the Fed. HE HAS HIT WORK CUT OUT FOR HIM. THE US INFLATION GENIE IS OUT OF THE BOTTLE. https://t.co/2g6cUhzVq1
30‑Year Yields Likely to Surpass 5% Barrier
BNP PARIBAS: “Is 5% a resistance level for 30y yields? We don’t think it is .. “.. After 30y yields broke the 4% resistance level in 2023, long-end yields unanchored. We see similar parallels .. scope for term premiums to rise...
Inflation Threat Grows: New Data Sparks Concern
Even before Iran started, we were saying inflation was turning into a problem. This week's data only adds fire to the worries. @sonusvarghese discusses it in our latest @CarsonResearch blog.
30-Year Yield Stays
Today, the U.S. 30-year benchmark bond yield remained above the critical 5% threshold. Bonds get crushed in wartime. With the U.S.-Israeli war on Iran, the bond vigilantes are riding again, and they are demanding a higher yield for Washington’s recklessness. https://t.co/5GNeEs9kKm
Bond Market Stays Silent Despite Scorching US PPI
One of the notable developments this morning is the "dog that didn't bark": the lack of a significant bond market reaction to a scorching US PPI print. The move in government bond yields has been de minimis, as shown in the...
US Debt Interest Hits Record, May Outpace Social Security
The Interest Expense on US Public Debt hit $1.27 trillion over the last 12 months, another record high. If it continues to increase at the current pace it will soon be the largest line item in the Federal budget, surpassing...
Core PPI Spikes; Money Supply Growth Remains Hidden Driver
Largest year over year increase in Core PPI in five years. That excludes food, energy, and trade. You know what they can’t strip out? Money supply growth. https://t.co/WYpCOQS2Vv H/t @lisaabramowicz1 https://t.co/BpYJcanI4S
Swiss 10‑Million Cap Could Slash Economy by 12%
A Swiss population cap of 10 million risks curbing economic output by as much as 12% through the end of the century, according to a government-commissioned study https://t.co/kyHi1xZgFI via @bbenrath https://t.co/qAYTSSK11U
Learn China's Challenges by Studying Japan's 1980s Growth
For those interested in understanding the pressures facing China today, the best place to start is by understanding the structure of Japanese growth in the 1980s and its adjustment in the next two decades. This two-part series addresses some of...
Global Imbalances and US/UK Roles Fuel Looming Crisis
Another very good Martin Wolf piece: "We are on a path to financial crises related in part to the stubborn persistence of imbalances and to the unique and, in my view, unsustainable roles of the US (and UK) as balancers...
Global GDP Projected to Drop 1% by 2027
Then be sure to watch my discussion tomorrow with @njhagens on The Great Simplification @Lucaswb8928. That should help separate signal from noise. My base case is global GDP growth averaging roughly -1% versus the prewar baseline of +2.5% through 2027. Clear enough?...
Debt Surge to $232T Threatens Faster Interest Rate Rise
"...somewhere between a federal debt of today’s $31 trillion and the 30-year projected level of $232 trillion, a brutal cycle of rising interest rates followed by even faster-rising debt will likely be unleashed. Responsible lawmakers and taxpayers should not want...
Japan's FX Intervention Powerless Against Massive Carry Trade
This is why Japan's intervention efforts won't work. The MOF - via BOJ - are trying to fight risk appetite and a healthy carry trade. That represents a vastly larger pool of wealth than Japanese authorities have in FX reserves to...
Commodities Enter Super Cycle as Copper Hits Record High
As I've said, "You want to be long commodities." COMMODITY MARKETS = ENTERING A SUPER CYCLE. https://t.co/G6PcKZlg6y
More Money Fuels Bigger, Costlier Projects, Jevons Paradox
The real Jevons paradox is in capital markets: the more money we create, the more expensive and ambitious the projects we invent to absorb it.
Satirical 10‑point Plan: Labour Quit, Dollar‑peg, Technocratic Takeover
My totally outrageous and not at all serious 10 point plan to save Britain. 1) The entire Labour government does the honourable thing and resigns on the basis that remaining in office merely guarantees it will preside over the eventual loss...
China Ramps up Dollar Swaps to Curb Yuan Rise
Bloomberg is reporting a $3b (CNY 17.4b) increase in the use of PBOC swaps in Q1 ... Que forecasts of dollar doom In the first quarter China (PBOC and state banks) bought $180 of fx to keep the CNY from rising --...
UK’s Rentier Economy Relies on US Approval
It is soon going to be revealed the degree to which the UK’s financial rentier model which subsidises the entire country is dependent on America’s cooperation and blessing.
US Plans T‑Bill‑Backed Stablecoins to Fund Deficits
"It's fine - we'll just shift issuance to the front end, have Warsh cut rates & flood the world with T-Bill backed stablecoins to finance US deficits..." https://t.co/pC68U8KAWt
ESF Funds Favor Wealthy Allies,
if the $212b (counting ~ $175b in SDRs that Republicans historically haven't liked using) Exchange Stabilization Fund is going to be given to allies without a financial need (like the UAE) not everyone is going to be able to get...
XRP Offers BRICS a Sovereign, Unfrozen Settlement Layer
Governments will not use RLUSD. They want their own stablecoin, their own treasuries, their own interest. RLUSD is also an issued asset Ripple can freeze. XRP cannot be frozen, clawed back, or minted by anyone. Swift participation means you can...
Turkey's Deficit Growing Pre‑Oil Shock, Targets $50B
I think the underlying issue that Bloomberg highlighted is that Turkey's current account deficit was rising even before the oil shock -- it stood at $35b in the 12ms to February, and was on a trajectory toward $50b even if...
Cleveland Fed Median CPI Jumps, 12‑month Rise Hits 2.8
The Cleveland Fed's median CPI was +0.40% in April, or 4.9% annualized. The 12-month median CPI ticked up to 2.8%, the first such increase since last summer. (The median CPI looks at the price change of the item sitting in the...
U.S. Inflation Stubbornly Above 2% for Six Years
Crafting headlines is notoriously challenging, particularly when trying to balance competing considerations and objectives. With that important qualification in mind, it is improtant to note that America’s inflation challenge isn’t just about the gas pump. The economy is now in its...
Xi Holds the Cards as US Bravado Masks Weakness
✍️ Gideon Rachman 👉 US president’s trademark bravado will be used to obscure the weakness of his position. Chinese are unlikely to rub his nose in it. 💥The reality, however, is that it is Xi Jinping who “has the cards”...
Trump, Xi Secure Fragile Trade Truce, White House Seeks Stability
After a bruising trade war consumed most of 2025, Donald Trump and Chinese President Xi Jinping agreed last fall to an uneasy economic truce. The White House, struck by Xi’s demonstrated willingness to push back hard on Trump’s tariffs, now...
Inflation and Hormuz Tensions Force Supply Chain Rethink
US inflation. Strait of Hormuz. What will retailers and manufacturers do? And their supply chains? And logistics?
CPI Inflation Signals Rate Hikes Despite Trump’s Calls
Despite Trump’s demands for lower interest rate, CPU inflation looks like a raise in rates is likely.
Hormuz Shutdown Spikes LNG Prices Abroad, US Stays Insulated
The closure (or near-closure) of the Strait of Hormuz has sent shock waves through the LNG market. Europe, which prices much of its gas at the TTF trading hub in the Netherlands, and Asia are getting hammered by the surge...
Core
Seen some say that ex-rent & OER the core was moderate, but not sure this is the case. Median CPI likely 0.40% and 16% trimmed likely 0.44%. Core ex-rent&OER was 0.26%, 3.1% SAAR. YoY rose to 2.3% vs a 2017-19...
CPI Shows Record Rent Surge, Contradicts Private Data
A truly bizarre CPI shelter inflation reading for April. CPI shows the fastest month-over-month ACCELERATION in rent and OER since 2023. There's zero evidence of this in any of the higher-quality private sector datasets. https://t.co/ylVrh5TORW
Iran Negotiates as Trump Seeks Exit, Shipping Bottleneck Worsens
Iran playing the negotiation game while Trump wants to get out of mess he made. And the ships stuck in the Strait and the supply shortages?
62 Months of High Inflation Undermines Fed Credibility
62. As in 62 consecutive months with US inflation above the Fed's 2% target. The Fed lost all credibility when it comes to fighting inflation. https://t.co/JG9GxNCk36
USTs Enter Depression Phase, Accept Potential Rate Hike Cycle
Looks like USTs are past denial, anger and bargaining, and well on their way to depression and acceptance of the possibility of a hike cycle.
April CPI Spikes, Wages Lag Low‑income, Affluent Spend
CPI rose 0.6% in April after a 0.9% increase in March, the fastest two-month gain since May and June of 2022. The index surged 3.8% from a yr ago, 0.2% above wage gains for the month & the hottest pace...
Homeowner Insolvencies Surge to 2009 Crisis Levels
Why Are Bankruptcies & Insolvencies Growing So Fast? They Have Reached 2009 World Financial Crisis Levels Main Reasons: - The Collapse of Residential Real Estate - Growing Unemployment in Full Time Jobs - Inflation Destroys Affordability This will likely get much worse The most striking aspect...
Fuel‑price Shock Persists as SPR Nears Historic Low
Headline inflation increased 3.3 -> 3.8% in April, although Core PCE was 2.6 -> 2.8%. Trump authorized a 53MM bbl release from the SPR yesterday and said that he’ll suspend the federal fuel tax. But assuming that inflation is driven principally...