Bullard: Wait, Did I Say That?

Not that futures needed any help melting down this morning, but Jim Bullard just poured gas on the fire. Yes, Jim Bullard! The Fed president who never had a hawkish thought in his life. "We were expecting an inflationary impulse, but this has been more than what we were initially expecting," says James Bullard. "The … continue reading →

The Fed’s Big Day

We’ve pretty much beat the inflation horse to death on these pages over the past six months. Bottom line, It’s too high and potentially out of control. So far, however, the Fed’s been able to hoodwink investors and algos and commandeer the bond market. Aside from making things much more difficult for the little guy … continue reading →

Why Bonds Are Still Important

I had an great question yesterday regarding the bond market: “Is it possible the fear of pandemic in spring 2020 affected the behavior of 2yr and 10 yr and then indirectly triggered the crash?” Pebblewriter longhaulers will recall that our bond cycle model forecast a severe plunge in interest rates long before anyone was talking … continue reading →

Update on XLF: Nov 17, 2020

After being stuck in a textbook triangle pattern for almost six months, XLF finally broke out last week. We noted its having reached overhead resistance a few weeks ago [see: Yield Curve Model – Correction Imminent.] At the time, the 2s10s was threatening a breakout which, per our model, suggested a downturn for equities in … continue reading →

Retail Sales’ Last Hurrah?

September retail sales sharply beat estimates, coming in at +1.9% versus 0.8% expected. With enhanced unemployment and virtually all other stimulus having dried up, however, this could be retail’s last hurrah. But, it’s enough to boost stock prices on this OPEX Friday 2 1/2 weeks before a presidential election. continued for members… … continue reading →

Oil Spikes on Iran War Worries

WTI futures spiked nearly 5% overnight in the wake of a US drone strike on Baghdad Airport which killed Iranian military commander Qasem Soleimani.  It is a dangerous escalation in the US conflict with Iran which broadened when Trump alarmed US allies by pulling out of the Iran nuclear deal last May. We argued at … continue reading →

Why Interest Rates Must Not Rise

In May 2014 many of us were shocked by a report that Ben Bernanke, who had recently departed the Fed, told a group of wealthy investors that he did “not expect the federal funds rate…to rise back to its long-term average of around 4%” in his lifetime. I remember feeling Bernanke’s statement represented both extraordinary … continue reading →

CPI: The Games Continue

Everyone who drives knows that gas prices increased more than 3% month-over-month  – the official, seasonally adjusted numbers from the BLS in this morning’s CPI report.  Data put together by non-governmental sources confirms it.But, folks like GasBuddy and AAA aren’t responsible for cost of living adjustments for millions of Americans.  So, unlike the BLS, they … continue reading →