One bond market recap featured the word "bloody." I suppose the hyperbole was apt. Last week was, in fact, dramatic for rates, and particularly the short-end. There's now a sense of alarm among markets that they've been cut out of the loop. Market pricing for rate hikes wasn't completely aligned with forward guidance in some locales, but the assumption was that any disagreements would be resolved gradually and amicably in accordance with post-financial crisis decorum. Central banks and marke
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3 thoughts on “Napalm

  1. Astoundingly good graphic to lead into the article.
    MMT=inflation countered by higher interest rates and higher taxes. If unemployment rate rises fiscal spending/hiring.
    Your finger has been on the pulse the whole time.

  2. Please tell me how higher interest rates will magically unclog the west coast container ports. Or encourage more older folks to reenter the labor force.

    “Policy mistake” is not simply a tail risk. It is an obvious fat tail risk.

    I wonder how the put/call skew on bonds will play out in the coming weeks.

    1. I believe that inflation is mostly transitory. The narrative has changed and currencies are relative to one another. Tightening should be short-lived as no government wants a currency to stifle exports

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