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The regulatory bond-bid (+ bank funding)
In my recent post regarding central bank balance sheet operations and bond market term premium (see how QE works), there’s a rather large unexplained divergence between model and reality in the most...
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QE-outlook dims as Summers brightens
The QE outlook has started to dim, as Lawrence Summers firms as favourite to replace Bernanke next year. This seems to be a bearish bonds / bullish USD development. Yesterday, Hilsenrath published an...
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FED can still sep-taper
Last night’s price action spoke to the virtues of sleeping deeply and turning off your phone. First, better than expected data drove yields higher (US 10yrs tipped 2.7%) and then the Fed downgraded...
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troublesome t-bills
Last night’s four week US T-bill auction result was a little odd. The auction of US$30bn of four week paper was well enough covered (~83bn of bids v. ~30bn of paper), however the results reveal a...
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FED can still sep-taper
Last night’s price action spoke to the virtues of sleeping deeply and turning off your phone. First, better than expected data drove yields higher (US 10yrs tipped 2.7%) and then the Fed downgraded...
View ArticleClik here to view.
Fed staff lose hope on inflation
Hidden inside the minutes to the Fed’s 30 April meeting is an alarming paragraph that suggests Fed staff have grave concerns about inflation expectations. The staff’s forecast for inflation was...
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What can the RBA do?
My judgement is that the RBA was truly open minded about both the extension of YCC and appropriate pace of QE when they announced the review of QE at their 4 May meeting. A prospective upgrade drove...
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