Powell Throws in the Towel

In speaking with CNBC in the wake of the Fed’s decision to cave on any further rate hikes, Richard Fisher said what many of us have felt for years.

“We created a one-way street…all of our markets are hooked on this opioid of cheap money.  How do you wean them from that after all those years of being dependent?”

Short answer: you don’t.  We saw in December what could happen if you even try.

Needless to say, the 10Y tagged our next downside target……and ZN tagged our next upside target… …which was first posted on May 18, 2018 [see: Bonds and Value.]

The fact that the tag took so very long to play out has certainly tested our patience.  More importantly, though, it offers vital clues about the next 18 months in the markets.

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