Yield Curve - Overnight Fed Funds Rate Through 30 Years

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Synopsis

  • Using the Fed-Funds Rates as the zero-duration starting point, the yield curve is inverted for 99 quarters, nearly 25 years.
  • If we use the 3-month T-Bill as the starting point (2.105%), the yield curve is "only" inverted for 58 quarters, 14.5 years.

New Home Sales

On Tuesday, a Census Department housing report showed New Home Sales Plunge 35.9% in the West, 7.8% Overall, Prices Down 8.1%

Powell Bluff

Also on Tuesday, Powell Chastised Trump and Praised Himself in one of the most self-serving Fed speeches in history.

Specifically, in a blast pointed directly at Trump, Powell proclaimed "The Fed is insulated from short-term political pressures—what is often referred to as our 'independence.''"

What a hoot.

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Uncle!

The Fed will cry uncle in July.

Expect at least one 25 basis point rate cut.

The market has a 100% chance of at least one cut.

Meanwhile - We Still Have Questions

Dear Jerome Powell, instead of patting yourself on the back and answering fluff prepared questions, how about addressing some real questions?

  • Let's discuss the Fed's economic models and their miserable performance.
  • Let's discuss bubbles.
  • Let's also debate the Fed's inflation expectation theory. I can logically show the theory is nonsense.

Answers Please

Hello Jerome Powell, We Have Questions

Please have a go at it, Mr. Powell.

Mike "Mish" Shedlock

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Yield Curve Will Invert From the Inside Out

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China's macro picture tumbled to its weakest since August 2016. Portions of the yuan yield curve inverted again as China attempts to rein in property bubbles and state-owned enterprise (SOE) excesses. The US yield curve hasn't inverted yet. What's in the cards?

Relentless Yield Curve Flattening

Most economists expect the Fed will hike at least twice more this year. If so, portions of the yield curve may invert.