Fed’s Yield-Curve Barometer Starts Flashing Recession Risk1 “A classic recession warning is flashing in the US Treasury market, where the 10-year note’s yield fell below the three-month bill’s”, It’s a rare occurrence, and it signals investors anticipate dire economic consequences of the Federal Reserve’s campaign against inflation. 1 Prior to brief, smaller…
The Liquidity Problem With the futures market indicating a 4.9% Fed funds rate by May 2023, the 2 through 10-year Treasury notes dramatically increase in order to price the Fed funds expectations. The stock market remains highly correlated to the 10-year T-Note yield, falling or rising in value as the yield…
Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” M2 money supply growth has accelerated from 1.9% in the fourth quarter of 2018…
The best indicator of risk in housing is the Housing Market Index (HMI). The index forecasts expansion in housing with readings above 50 and contraction when readings are below 50. An index of 30 or less has historically indicated recession and a major housing downturn. This has in turn affected…
Previously Recommended to Buy on Weakness. Now, Simply Buy. Key Takeaways Federal Reserve officials are starting to stake out different views on how fast to raise interest rates as they balance hot inflation against rising stress in the financial markets.Bank of America says credit stress is at a “borderline critical level” beyond…
