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As Bonds Find ‘Best Friends’, Stocks Grapple With Inversion Freakout
Well, you can expect the week ahead to be dominated by relentless hand-wringing over bonds and the extent to which Friday's 3M-10Y inversion presages famine, pestilence and, naturally, locust plagues.
To be clear, Friday's action doesn't bode particularly well, but it was a bit of a "perfect storm", so to speak, and by definition, "perfect storm" scenarios are anomalous.
JGB yields had to play catch up (or, actually, "catch down" is better) to the dovish Fed after a holiday and the Japan CPI m
Am I the only one who thinks there’s plenty of inflation in the system. Here in NYC, prices for pretty much everything are high and getting higher.
That part of the system (inflation ) is systematically rigged by an informal and unwritten consortium consisting of both Corporate influences and Government sponsorship. In other words neither objects to the actions of the other because they are both trying to keep their feet fixed to the tightrope that benefits both and was of mutual design.
I am not buying the “we are worried about low inflation” line. Core PCE is a 1.9, Core CPI is 2.1 and the YoY AHE came in at 3.4. The Phillips curve is not dead. There has been a bit of a rally in crude, and food may go a bit higher as well so even the top line numbers may bounce.