If you’re not talking about the inexorable flattening in the U.S. curve in public settings, well then one wonders what the hell it is you’re saying at the bar when you’re spittin’ game to the waitresses.
Something tells us this is an underappreciated tail risk, indeed.
“Indeed, the Donald’s impending attack on the purported sacred ‘independence’ of the Fed is the Orange Swan that looms over the casino.”
Got all of that?
An “optimal control problem.”
STRONG MAJORITY OF FED OFFICIALS SAW TRADE WAR AS DOWNSIDE RISK
FED SEES `SIGNIFICANT’ FISCAL-POLICY GROWTH BOOST NEXT FEW YRS
A NUMBER FED OFFICIALS SAW OUTLOOK WARRANTING STEEPER RATE PATH
“What happened each time the Fed stopped QE? Yields fell. The complete opposite of what Jamie would predict.”
“The U.S. unemployment rate is down to 4.1 percent, and economic growth could well increase in 2018. Consumer and business confidence is high. What could go wrong?”
Say your prayers.
“In our view, Fed put is currently moving deeper out of the money. This is effectively a withdrawal of convexity and risk assets are reacting with what at the moment appears as a reinforcing loop.”
In essence, the same things everyone was watching last week (e.g. tech, trade, Trump) will be in focus again…
“If you want to blame someone, blame the Fed. And I am sure that is exactly what President Trump will do when he loses patience and moves to remove their independent status.”
“The single most important price in all of capitalism is the interest rate—-and at all points on the maturity curve. And the single most important truth about honest interest rates is that they must be discovered by markets, not imposed by the state.”
Hyperbole is fun!