Monthly Archives: March 2023

The market is betting the Fed will have to cur rates by September-December 2023. We don’t (yet) know if the market is pricing in a fast drop in other economic sectors.  Many commentators (and the Fed’s own projections) expect a … Continue reading →

For devotees of the (missing and suspected dead) Phillips Curve cargo cult, the Fed can’t stop raising rates until we see major unemployment.  I do not share their faith in the defunct Phillips Curve or an all-powerful Fed.  I agree … Continue reading →

A lot of people expect the Fed to keep raising rates to drive “the economy” into a recession.  They don’t give much thought to the route we’d take to get there;  What sub-sectors of the economy are (or are not) … Continue reading →

Markets now see a a 97.6% chance of a Fed rate cut by September 2023.   Market consensus is “the Fed will have to cut rates because we will have a recession.” But what if we get a rate cut … Continue reading →

This was supposed to go out Tuesday night, but the power went out here.  It still holds pretty well.  Addendum:  The Fed did raise rates 25 bps, but made noises about slowing down etc…. In “potential bar fight” terms, the … Continue reading →

Looking ahead, we probably face either (mild) inflation or debt deflation.*  Both leading to the same place.  Losses on assets. * [Debt Deflation] = deflation, causing people to default on their consumer loans and mortgages. Bank assets fall because of … Continue reading →

We risk another 2008-style crisis.   Is that really preferable to 3%-4% inflation for a year or two longer than we’d like?  Even that is a false choice – ignoring all the other tools we have to fight inflation (that … Continue reading →

What a weekend to be locked out of your own blog account! A bit of a grab bag of thoughts here – sorry for some repetition…. Silicon Valley Bank has taken us from from “higher [rates] for longer” to “not … Continue reading →

I am not an energy expert by any means.  Nor am I a Ukraine expert.  So why not look at them both?  🙂  At least I can ask some relevant questions even if I can’t fully answer them. I believe … Continue reading →

This excellent Axios piece (pasted in below) gives us our Zen koan for the day. Investors hang on every last word out of the Fed. The real economy doesn’t give a sh*t Which is… “reality?” As a bonus, one of … Continue reading →