Bulls cannot be happy about this. pic.twitter.com/NfFgOifsZe
— Jim Carroll (@vixologist) June 17, 2021
Great reflation trade/steepener unwind well underway in Treasuries today.
Post Fed 2-day curve flattening so far is sharpest since 2020 liquidity crisis. Some move👇 pic.twitter.com/6Wxgz50br2
— Edward Bolingbroke (@EddBolingbroke) June 17, 2021
Nothing is fucked here dude, nothing is fucked
You’re being totally un-dude pic.twitter.com/wByYMWAD5T
— Quoth the Raven (@QTRResearch) June 18, 2021
— Tracy (𝕮𝖍𝖎) (@chigrl) June 18, 2021
Many other commodities are in a deep correction.
— Michael A. Gayed, CFA (@leadlagreport) June 18, 2021
credit default swaps exploded higher on the news of tapering talks
— Alessio (@AlessioUrban) June 18, 2021
— Invariant Perspective (@InvariantPersp1) June 18, 2021
STOCKS, CRYPTOS, YIELDS, EVERYTHING COLLAPSE; GRIM HAPPENINGS AHEAD OF JUNETEENTH *
— The_Real_Fly (@The_Real_Fly) June 18, 2021
Monetary policy is likely to be a delicate game—a tightening ahead of schedule can lead to a slowdown, while a delay may mean inflationary expectations getting unhinged, leading to volatility in financial markets and an eventual dip in growth.
A reversal in the 10-year yield and a move back into growth stocks both suggest the growth outlook has deteriorated.
The debt crisis is the biggest problem facing the Fed. They are trapped and they know it. Even nominally raising rates has the potential to lead to a crisis across the country. Transitory inflation is a double edged sword.