Thanks James. Interesting to see if we get the usual "September effect" this year where liquidity is seasonally often a little thinner in the sovereign debt markets and yields tend to have upwards pressure into early October. Didn't really happen last year iirc, but did the last few years and especially in the last midterm year, Sept 2022.
What I still have never understood is why anyone/organisation would decide to purchase 10/20/30 Year Bonds from any country that spends itself into, effectively, bankruptcy.
The Romans were clipping coins when everyone still walked everywhere in sandals 🩴.
At least Oracle is getting smashed for its profligately.
Why do the “Drunken Sailors of Gov’t” on Planet Earth not get a more forceful reckoning?
Would like to hear Your and Readers thoughts on this indescribable myopia.
As always, great write up James! Thank you for taking the time to break these complex topics down in ways we can understand. It sounds like both the Fed and the Treasury are trying everything they can come up with except ONE thing.... spending less money! 😉
“…there should be no misunderstanding: The Fed’s price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target.”
“I stand here today committed to a discipline, not to a decision.”
".....the rent on money is the return that a buyer demands for tying up cash for thirty years. This is on top of whatever they figure inflation is going to do. Bloomberg’s model priced it at about 1.45% on Thursday.
This is against a five-year average of about 0.47%, meaning it is currently priced at about three times the recent norm....."
While the entire conversation is worth your time, if you are pressed then at least listen to the segment of whether AI will cause a sovereign debt crisis.
Then ask yourself how could anyone be so obtuse on being committed to a 2% inflation target?
Totally agree that when someone talks about long-term targets, and processes, and “don’t spend your time always watching what we’re doing,” then they’re playing for time and there’s a really good chance they won’t be able to fix their problem.
Wonderful article James. Will start having to call you Zen Lavish :-) Kudos and thank you.
Thanks James. Interesting to see if we get the usual "September effect" this year where liquidity is seasonally often a little thinner in the sovereign debt markets and yields tend to have upwards pressure into early October. Didn't really happen last year iirc, but did the last few years and especially in the last midterm year, Sept 2022.
Great Stuff James. Thanks.
The “Casino” reopens Monday/Tuesday.
What I still have never understood is why anyone/organisation would decide to purchase 10/20/30 Year Bonds from any country that spends itself into, effectively, bankruptcy.
The Romans were clipping coins when everyone still walked everywhere in sandals 🩴.
At least Oracle is getting smashed for its profligately.
Why do the “Drunken Sailors of Gov’t” on Planet Earth not get a more forceful reckoning?
Would like to hear Your and Readers thoughts on this indescribable myopia.
Best
As always, great write up James! Thank you for taking the time to break these complex topics down in ways we can understand. It sounds like both the Fed and the Treasury are trying everything they can come up with except ONE thing.... spending less money! 😉
great week James - 10 trillion in paper
over next 12 months needs to be sold....that pretty much sums it up to me....
For context:
“…there should be no misunderstanding: The Fed’s price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target.”
“I stand here today committed to a discipline, not to a decision.”
".....the rent on money is the return that a buyer demands for tying up cash for thirty years. This is on top of whatever they figure inflation is going to do. Bloomberg’s model priced it at about 1.45% on Thursday.
This is against a five-year average of about 0.47%, meaning it is currently priced at about three times the recent norm....."
Then listen to this conversation between Dwarkesh and Dylan - https://youtu.be/aV26V1UvkJw
While the entire conversation is worth your time, if you are pressed then at least listen to the segment of whether AI will cause a sovereign debt crisis.
Then ask yourself how could anyone be so obtuse on being committed to a 2% inflation target?
Totally agree that when someone talks about long-term targets, and processes, and “don’t spend your time always watching what we’re doing,” then they’re playing for time and there’s a really good chance they won’t be able to fix their problem.