You need a PLUS account to view this content. Try one month of PLUS for FREE.
Already have an account? log in
Investors Say No Thanks To TIPS
The Treasury auction drama continued on Tuesday with a tailing 10-year TIPS sale.
I should emphasize: There's a reason I've devoted so much time recently to Treasury auctions. Supply concerns were the driving force behind the "earthquake" (to quote Chris Waller) repricing at the long-end of the curve. It was that repricing which tightened financial conditions and undercut equities late in Q3 and into Q4, prompting the Fed to suggest that another rate hike may not be necessary after all.
This m
Great point on the divergence from consumer confidence survey data.
The surveys paint a picture of the general mood, but using them to trigger investment or, even worse, monetary policy decisions is questionable. For instance, C-C stats have long had pretty low correlation to retail sales.
“crude is falling”
A three word detail, but so substantial. Energy (understood broadly, and for which crude is a proxy) is the ultimate inflation driver. Its impact is dwarfed only by geopolitics and labor, both of which tend to be slow moving and pseudo-stable. Neither geopolitics nor labor meets those criteria at the moment; regardless, crude is such a lever. Everyone else is just fighting over the fulcrum.