I received a number of very similar responses to this past Monday’s note on the Libor/OIS spread. It seemed a group of readers felt I was completely dismissing ANY importance of the recent move. That couldn’t be further from the truth – so let me clarify. The point of...
While a return to 1970s-style wage inflation and 1930s-style trade wars is all the rage across the hater community, another brick in the 2018 wall of worry that comes up consistently when speaking to clients is Libor. The old 2007-09 proxy for funding market stress,...
Fiscal policy, regulatory policy, and even Fed policy have taken a back seat to the new driver of daily swings in financial markets: trade policy. I have spent a bit of time in recent notes over the last month trying to dissuade folks from getting too bent out of...
As many of you are aware, we are holding another Global Macro Speaker Series event next week on 2-Apr-2018 in New York City. It will be the usual fireside chat structure, lasting about one hour. And this time our guest will be Janet Yellen. As was done with our prior...
February and March of 2018 have not been kind to risk parity lovers like myself. The start of the year was just fine as spoos ripped higher and rates suffered only a mild sell-off throughout January. Then, the higher than expected wage data in the February payroll...
Hawkish hype surely gained traction in the lead-up to Jay’s first FOMC meeting this week. Talk of four – and whispers of even five – rate hikes in 2018 was becoming ubiquitous. But in the end Jay delivered a calm, cool, and clean FOMC rate-hike decision. His...
Janet was always convinced that there existed excess labor market slack in the post-crisis economy. And as such, the low participation rate and low employment-to-population ratio were never permanent fixtures in her long-run economic view. She also believed that...
Well, it had to happen at some point. We all knew Trump had the power to set tariffs unilaterally as long as he invoked national security concerns. And steel and aluminum were certainly natural candidates. The questions now of course center on international escalation...
A new Fed chair does not enjoy all the luxuries afforded a veteran. Small missteps can create plenty of anxiety in markets. We all got to know Janet, Ben, and Alan over many years. But it did take a while, and looking back at the initial courtship periods, there was...
Ten-year US Treasury yields have backed up about 50bps to start the year. And to be sure, there exists no topic more discussed in financial markets than what’s behind this rate move. The two most common explanations I hear from clients and colleagues are: Higher...
Ten-year US Treasury yields have backed up about 50bps to start the year. And to be sure, there exists no topic more discussed in financial markets than what’s behind this rate move. The two most common explanations I hear from clients and colleagues are: Higher inflation expectations Increased UST supply Looking through the lens of […]
