Posts Tagged ‘Janet Yellen’
The Powell Put is Struck Lower
In spectacular fashion, over the past few weeks, stark reminders emerged on how fast confidence unravels in the midst of a slowdown, particularly so, when the slowdown is doused with policy response errors. A conflux of negatives compounded to send US financial markets into bear market territory, ultimately, calling into question the economic expansion since…
Read MoreTurkey Day Highs
The bull market is set to turn 9 in 2017. Vanquished by the bull: Eurozone crisis, deflation, China bubbles, taper tantrums, BREXIT, and now Trump. The bullishness of the tape continues to shock, with the Trump rally, after the fact, looking strikingly similar to the BREXIT rally; the market provides every indication that one outcome…
Read MoreNo Man’s Land
an anomalous, ambiguous, or indefinite area especially of operation, application, or jurisdiction definition two: financial market direction over the 2015-2016 period The meandering, low-volatility, sine wave oscillations of the tape continue. How did markets arrive at a point where a 3% pull-back is petrifying, and a 5% pull-back feels like a crash? The Brexit pull-back…
Read MoreYellen Fed & Monetary Policy: “Running it Hot”
The September Fed meeting issued few surprises; fed funds were not hiked, as was telegraphed by the Brainard speech. While the Fed maintained interest rates, in the press conference, Yellen once again, found a way to interject incremental dovishness, driving interest rates lower, and asset prices up. The playbook of the Yellen Fed for the…
Read MoreBig in Japan; Can the Fed trump the BOJ?
VIX back to the 15 range ahead of a consequential Fed meeting, deep into the economic cycle. Volatility crush continues into actual central bank announcements. Zombie US markets can’t go down but can’t rally either. After recent, underwhelming ECB announcements, markets sense more to come from the Fed, yet a gasping sense reigns omnipresent. What, actually, can…
Read MoreInmates Running the Asylum; Fed Policy 8-years into Recovery
Last week, a Fed Governor, made comments hitting Bloomberg, that the Fed was not a handmaiden to the markets. The comments, not part of a major speech, and difficult to find on Google, were striking, and provocative, conjuring memories of a period when this would never need to be said. Today’s baffling Fed communication strategy…
Read MoreValuing the Yellen Put
The Yellen Put, follows a line of Federal Reserve inspired put options, valuable to market participants of specific Fed Chair eras. The rationale behind the Fed Chair put is simple; with the Federal Reserve so vigilant to support any downtick in the economy and/or markets with interest rate cuts (Greenspan), quantitative easing (Bernanke), and ZIRF…
Read MoreThe Fed Awakens; Creates Negative Global Market Backdrop
At the widely anticipated December 16th Fed meeting, the Board of Governors did the expected, and finally raised the US federal funds rate by 25 basis points. The rate-hike failed to surprise markets; the move was telegraphed and written about in advance by Jon Hilsenrath in an article on the front page of the Wall…
Read MoreISM sinks to post-2009 lows; Industrial Economy Recession a Catch 22 for Fed
November ISM sank to the lowest level since 2009. Stunning, that the ISM (Institute for Supply Chain Management) survey, formerly known as NAPM (National Association of Purchasing Managers), printed 48.6, the lowest level since the throes of the financial crisis. For perspective, the last time the ISM printed sub-48, in June 2009, the S&P was 900. Today,…
Read MoreSuper Dovish Fed Persists
The Fed’s lack of policy response, and subsequent press conference, evokes memories of a scene in Bronx Tale… What’s going on here? Now you can’t leave. I will never forget the look on their faces. All eight of them.Their faces dropped. All their courage and strength was drained from their bodies. They had a reputation for breaking up…
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