Yield Curve – Overnight Fed Funds Rate Through 30 Years
Click on chart to expand.
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.
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
Tax revenue hasn’t been collapsing for 25 years like it is now,fed hasn’t been printing money and buying/owning well….everything for 25 years like there are now.
The entire bond market can be explained by almost all new issues are bought up by central banks. Countries have excess reserves due to money printing and have no where to park them but in each others bond markets. No individual would ever pay, say $103, for a bond with a coupon rate of 0.5%. You would only do that if it was the only thing you could do with the money.
“Yield Curve – Overnight Fed Funds Rate Through 30 Years”
Subtracting debt from GDP, what has been the real GDP growth over the last 30 years? Debt creates an illusion.
Subtract debt from housing. What are homes really worth?
Subtract debt fueled buybacks from the stock market. What is the stock market really worth?
But you cant actually do any of that, soooooooo
Can’t do what? The amount of debt to GDP is known. Denninger has talked about it several times. The amount of debt fueled buybacks is known, as well as its impact on stock prices.
In the future we will be paying tor other things the way people do with houses and cars and furniture. A healthy economy should be defined by not how much credit is being used but how much debt is not being taken on.
“what has been the real GDP growth over the last 30 years? “
Traditionally, a person’s wealth has corresponded somewhat closely with how much energy he can command. Hence the huge wealth increases associated with steam, then hydro, nuke and petroleum.
Energy availability for most people did continue to increase, in the US, up until the mid to late 60s or so….. After that, it stopped growing, with the focus turning instead to using money printing to transfer available energy from productive wealth creators and industry, to idle leeches creating nothing of value at all.