#Bonds are our top pick. 3% looks like a 10y UST yield ceiling. #recession is here and major #liquidity squeeze on-going. Just look at skidding term premia (black). Shows investors demanding 'safe' assets pic.twitter.com/BRXpvw0tVT
— CrossBorder Capital (@crossbordercap) August 5, 2022
#Bonds are unambiguously going for it! Fed terminal policy rate expectations falling (black) and term premia (orange) skidding. US Treasuries expect a Fed pivot and either deep US recession or shortage of collateral. Neither look great for #stockmarkets pic.twitter.com/YIVIrXYMdh
— CrossBorder Capital (@crossbordercap) August 3, 2022
#Recession alarm in the US grows louder: Yield-curve inversion hits widest level in 22yrs. US 2s10s yield spread has dropped to -37bps, lowest since Sep2000. pic.twitter.com/VZl0fJmywv
— Holger Zschaepitz (@Schuldensuehner) August 4, 2022
Wow this is something. The average American has less disposable income (in real dollars) today than right before the covid lockdown. pic.twitter.com/j3BlKvOKfe
— 𝐉𝐚𝐲 𝐂𝐨𝐬𝐭 (@JayCostTWS) August 6, 2022
Whoa! How much evidence do you want? Largely same story in every economy that has followed QE/QT policies and robust through time…just wait and watch t.co/HDVLzU78lY
— CrossBorder Capital (@crossbordercap) August 4, 2022
Ex-Fed insider: A full-blown recession is almost certainly coming
New York (CNN Business)The Federal Reserve’s war on inflation will eventually kill the economic recovery from Covid-19, former Fed official Bill Dudley warns.
The problem is that the Fed began its quest to tame inflation late, leaving the central bank little choice other than to slam the brakes on the economy by drastically raising interest rates.
“Almost certainly there will be a full-blown recession. If we’re not in one yet, I think we will be in the next 12 months,” Dudley, the former president of the New York Federal Reserve, told CNN in a phone interview.
I've predicted all along that when the Fed pivots neutral there will be a short covering rally. I meant when the Fed really pivots.
CME futures are now at 68% for a .75% rate hike in September.
The imaginary pivot is over.
When the time comes to pivot, bulls won't be buying. pic.twitter.com/Doj5u1lJdU
— Mac10 (@SuburbanDrone) August 6, 2022
— Wall Street Silver (@WallStreetSilv) August 6, 2022
Consumer Credit Surged In June, 2nd Largest Monthly Increase Ever
ZeroHedge – On a long enough timeline, the survival rate for everyone drops to zero
US Treasury Yield Curve Inverts Further To -37.6, Most Inverted Since 2000
And the “sizzling” jobs report isn’t feeling any love in the bond market where the US Treasury yield curve (10Y-2Y) deepened its inversion to -37.593 basis points, a drop of -1.331 BPS. Note that the 10Y-2Y curve falls below 0% just prior to every recession.
Summers Warns of ‘Economic Distress’ As Fed’s Powell Holds Out Hope
Some economists — including former Treasury Secretary Larry Summers — say Powell is being much too optimistic about the Fed’s ability to tame prices without pushing unemployment much higher. The implication: The Fed chief, who has sought to elevate the central bank’s focus on boosting the labor market, may be forced to accept millions of job losses and a significant recession to curb inflation.