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Supply, Ackman, Fitch Or All Three?
The bond selloff extended meaningfully on Thursday, as supply concerns, the Fitch downgrade and, at the margins I guess, Bill Ackman's long short tweet (there's a great joke or two buried in there if you look hard enough), weighed on the market.
I'm skeptical that we know anything now we didn't know coming into this week. There were a few ostensible surprises in the refunding announcement but nothing earth-shattering, and while the Fitch decision surprised some market participants, the rational
Re: Ackman – a Pump & Dump by any other name would smell so foul! [OK, maybe it’s a Dump & Pump?
UST yields are telling us 2 things:
1- We’re actually moving towards healthy long term growth trajectory in the real economy in which positive real yields exist and systemic poverty is reduced. Aka secular macro paradigm shift in the interest rates complex and all yield related financial products.
2- Inflation will stop going down and the next CPI and PCE prints will likely support this.
Leaves me with 2 questions:
1- Will we get stuck in stagflation or will we fix the economically destructive tax policy currently benefiting only the highest wealth holders while hurting everyone else as well as the real economy?
2- Can we escape the current epoch and finish the transition to the new without a great reset of financial assets especially real estate?
+1