Treasury yields rose again this week; blame this one on Fed Chairman Powell. In an interview at the Wall Street Journal’s Job Summit, he said that the Fed isn’t ready to stop the run-up in yields “until financial conditions tighten.” In so saying, he paved the way for those financial conditions to tighten as markets immediately obliged. We can’t help but think that it would have been better if he …Read More
Tag Archives: Bankruptcies
The Inflation Scare
Interest rates backed up last week. The 30-year T-Bond, which was 1.19% on August 4, closed at 1.44% on Friday (August 14). The 10-year T-Note closed at 0.71%. It was 0.52% on August 4. The CPI showed up with a +0.6% M/M rise (7.4% annual rate) for July. That pushed the Y/Y rate to +1.0% from +0.6% in June. Clothing prices rose +1.1% M/M in July. They had risen +1.7% …Read More
Money Explodes; Gold Glitters; The Recovery Slows
I often get asked why the price of gold is rising, and, as a follow on, will it continue. The price of gold has always had a significant correlation (80%) with the Fed’s balance sheet (i.e., the “money supply”), especially during periods of significant balance sheet expansion (money printing). The table shows the Y/Y change in the money supply of the western world’s major economies. The U.S., clearly the largest …Read More
