Christopher Whalen

Self-Fulfilling Yield Curves

New York – Happy summer. Much has changed in the markets since the last meeting of the Federal Open Market Committee several weeks ago. The target for short-term rates was cut a quarter point and, more important, the runoff of the Fed’s balance sheet ended, removing the tightening bias to US monetary policy. We had called loudly for the latter and discounted the former, most notably in a discussion on CNBC, so we view the FOMC action as the least that could be done given the political noise