While Treasury supply is in the process of turning up after years of decline, Treasury demand continues to decline. That’s a recipe for lower prices and higher yields.
Treasury supply was light from mid September to mid October. But the party is over now if the Treasury follows the TBAC.
Withholding tax collections have continued to surge right up to this week, but other taxes are weakening. The pattern suggests that the highest earners are seeing outsized gains that skew the top line numbers while the bulk of the population stagnates. Here’s what that means for the market outlook.
Macroliquidity is still growing. The pace of growth accelerated a bit in the third quarter, but that’s about to change as the Fed starts draining funds from the banking system in October.
The Fed has done the deed. It will begin the process of “normalizing” its balance sheet in October, just as their proxies had clearly told us it would. “Normalizing is the Fed’s euphemism for tightening, draining, pulling the punchbowl, siphoning money out of the system, crushing the speculative longs, and ultimately killing the bull market.…
While Treasury supply is in the process of turning up after years of decline, Treasury demand continues to decline. Here’s what this means for your money.
A debt ceiling deal has been done. While it’s only for 3 months, it means that the Treasury can resume borrowing without restriction. An increase in borrowing will be needed to repay internal funds that the Treasury has raided since the debt ceiling was imposed back in March. Additional borrowing will also be needed to…
Tax collections cooled in August after a strong July, but comparisons were misleading. Here’s why and what it means for the markets.
The evidence suggests that ECB machinations have had no effect, other than to give the banks a bonus for doing nothing other than passing money around amongst themselves. ECB policy has seemed more like Animal House, a series of “really stupid and futile gestures,” which taken as a whole, are simply ridiculous. If it weren’t…
US macro liquidity growth continued in August, but stock prices remain at a record overbought reading versus liquidity. Here’s why that really matters right now, and what to do about it.