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Trader: Everyone Is Missing This Important Indicator
By Kevin Muir of “The Macro Tourist” fame; reposted here with permission
Today’s topic will once again involve swap spreads. I am admitting this fact up front in the hopes of convincing you to read on. I know many readers find this obscure part of the institutional fixed income market complicated, and more often than not, boring. I get it. It’s not nearly as exciting as reading about strapping on some S&P 500 risk, or selling VIX, or god-help-you, buying the latest ICO offering. Bu
It will also mean a significant increase in inflation. Arguably, the remarkable decline in velocity of money has been the one thing that has prevented the central bank printing presses from causing the mysterious lack of inflation. If he is right, and his argument seems sound, then we can all look forward to a pretty good uptick in prices with Fed Funds and the entire yield curve along for the ride. I wonder if his description of the increase in dollar supply will offset the increased demand that will come from higher rates, but it is certainly possible