We know there are Fed rate cuts coming in September and that there is very good chance it will be 50 bps. Could policymakers also surprise by ending QT (not that it matters)? Might that be a first step toward the next QE? It's not as far-fetched as you may think; after all, some at the Fed were talking rate hikes just two months ago. Eurodollar University's conversation w/Steve Van Metre Bloomberg Fed’s Waller Says Jobs Data ‘Requires Action,’ Open to Big Cut https://www.bloomberg.com/news/artic...
Sep 09, 2024•19 min•Ep. 877
More meltdowns across key markets, starting with the Treasury curve rapidly unwinding. Commodities are getting crushed, gasoline absolutely smoked. Swaps. Yen. The August payroll report only further confirmed the reasons why all this is happening. Eurodollar University's Money & Macro Analysis Bloomberg OPEC+ Pauses Oil Supply Hike in Effort to Reverse Price Slump https://www.bloomberg.com/news/articles/2024-09-05/opec-has-deal-to-pause-planned-oil-hike-for-2-months-delegate https://www.euro...
Sep 08, 2024•19 min•Ep. 876
Politicians always feel the need to do something even if they don't know why or what's actually wrong. That's all "price controls" really are since they sure don't control anything like prices. Unknown to most people, the US has already experimented with them running price and wage restrictions for several years. The results are conclusive. Eurodollar University's Money & Macro Analysis Robert Bleiberg Farewell to Wage and Price Controls https://imprimis.hillsdale.edu/farewell-to-wage-and-pr...
Sep 06, 2024•19 min•Ep. 875
Carry trade is back! In reality, it never left. Not because of BoJ rates hikes or threats, rather all the growing evidence the US isn't at risk of recession, so many indications showing it's here. Oil and gasoline are crashing. Curves unwinding. Forward rates project...a total mess. In time for all of the fun, JOLTS shows job openings plunge and layoffs jump. Eurodollar University's Money & Macro Analysis CNBC Job openings fell more than expected in July in another sign of labor market softe...
Sep 05, 2024•18 min•Ep. 874
While the world was focused on financial volatility and liquidations at the start of August, something odd happened at the Federal Reserve's Discount Window (DW). Given everything else that has gone on since then, starting with the yield curve then considering now-cracking commodities, plus foreigners' dollar buffers and even US dealer banks' collateral holdings, there aren't that many ways to interpret what banks are doing - or not - at the DW. Eurodollar University's Money & Macro Analysis...
Sep 04, 2024•22 min•Ep. 873
Wholesale gasoline prices plunged in August to their lowest since the start of the year. This sounds like a positive, both for consumers as well as Fed policymakers and the disinflationary impact on consumer prices. But refinery margins have crashed to their lowest in three and a half years which instead points to more and bigger trouble. Eurodollar University's Money & Macro Analysis CNBC Oil prices ease on US gasoline demand worries, economic data https://www.cnbc.com/2024/05/29/oil-rises-...
Sep 03, 2024•18 min•Ep. 872
The most significant macro data from the past week certainly wasn't GDP (it wasn't even the most important datapoint within its own series), instead it was personal savings. It is yet another confirmation of what we've been hearing from across the economy and markets. Consumers are tapped out, and they're out of money because of jobs and incomes. Eurodollar University's conversation w/Steve Van Metre BLS Metropolitan Area Employment and Unemployment (Monthly) https://www.bls.gov/web/metro.supp.t...
Sep 02, 2024•19 min•Ep. 871
People keep saying the economy is in the toilet and the US government keeps raising its estimate for GDP. The general public isn't wrong, GDP is. How do we know? Because that's what GDP says - its other side. Not as well known, it should be because this is the one which is far more accurate during cyclical downturns. History, academic studies, consistency with other signals, not to mention how much it backs up popular perception. Everything including the better side of GDP is lined up against GD...
Sep 01, 2024•19 min•Ep. 870
New information from various sources all around the US service sector shows a downturn taking hold in that segment with employment signals turning more and more negative. It confirms the ongoing and more decisive bull steepening continuing to take shape in the Treasury market. Even mainstream sources are having to cover the fact there is something big happening when you can see it in services. Eurodollar University's Money & Macro Analysis CNN A key part of America’s economy has shifted into...
Aug 30, 2024•18 min•Ep. 869
German observers are saying the economy has reached crisis proportions and the reason is what the US economy's weakness is doing to the rest of the world. Rather than recover as many in Europe had hoped, the situation has turned grim due to America's growing negatives. As one result, bulls are firmly in charge of all the curves. Eurodollar University's Money & Macro Analysis IFO Business Climate Index deteriorates (August 2024) https://www.ifo.de/en/facts/2024-08-26/ifo-business-climate-inde...
Aug 29, 2024•19 min•Ep. 868
Chinese e-commerce retailer Temu becomes the latest global consumer business to warn about the economy - exactly what bonds have been doing all year much to the growing frustration of authorities. They'd rather derail lower market rates at the same time as cutting their own? It actually does make a lot of sense as all these things are related. Eurodollar University's Money & Macro Analysis Bloomberg PDD’s Warning Highlights Growing Strain on China Consumer Firms https://www.bloomberg.com/new...
Aug 28, 2024•18 min•Ep. 867
Just as low interest rates are being validated in every way, some Economists like Nouriel Roubini are alleging that yields are instead being held down by noted monetary genius Janet Yellen who has the Treasury Department engaged in a form of stealth QE. The problem is actually Economists who think interest rates are nothing more than tools to be manipulated by all-powerful govts when in reality they are more accurate though not perfect reflections of how govts fail. Eurodollar University's Money...
Aug 27, 2024•19 min•Ep. 866
Jay Powell's Jackson Hole appearance and speech wasn't really about rate cuts. It was a sales job trying to sell you and as much of the world as possible on the Fed itself. Just making the pitch, however, means implicitly admitting the US economy just leapt out of the frying pan and into the fire. Powell says it's OK because he knows how to turn the heat down when there is zero reason to believe anyone at the FOMC knows where it is us or what the temperature is going to be. Eurodollar University...
Aug 26, 2024•19 min•Ep. 865
It wasn't just a pivot, Powell admits the US economy is in trouble as unemployment has already started rising. While that's it's own can of worms, there are also more monetary and financial considerations related to what happened early in August. CLOs, collateral, stock market liquidations, all tied to what the Fed just agreed to. Eurodollar University's Money & Macro Analysis EDU YT Japan is buying MASSIVE Amounts of Junk Credit https://www.youtube.com/watch?v=_a_2J6mU48o CNBC Jay Powell Ja...
Aug 25, 2024•22 min•Ep. 864
The economy really has deteriorated quickly, enough that what seemed highly unlikely if not impossible early in July was very near to happened at the end of the month. I said a July Fed rate cut was in play on the 3rd and now according to the FOMC's minutes...it was. That, along with panicky central bankers seeking to quicken the pace of cutting, is definitely not a good sign. Eurodollar University's Money & Macro Analysis EDU YT This Could Force the Fed to Cut Rates in July https://www.yout...
Aug 23, 2024•21 min•Ep. 863
Was Macy's the latest victim of the strong labor market? That doesn't make sense, of course, and now the government data has been revised massively lower to better align what really happened last year with where we are this year. The new figures show not just one-third fewer jobs gained, more importantly what that does the rate of change in the rate of change (2nd derivative). It ends up in Macy's sales forecast. Eurodollar University's Money & Macro Analysis CNBC Macy’s cuts sales forecast ...
Aug 22, 2024•19 min•Ep. 862
Gold jumped to another record high at the same time stocks are back closing in on theirs. Only two weeks after global financial chaos that has everyone wondering where things are heading, the implications of each could not be more different. So, where does everything else stack up? Is it just gold vs equities? Eurodollar University's Money & Macro Analysis Reuters Gold extends record rally on dollar weakness, rate-cut bets https://www.reuters.com/markets/commodities/gold-steady-near-record-h...
Aug 21, 2024•19 min•Ep. 861
Economists and officials therefore the financial media continue to downplay the plunge in US consumer confidence, repeatedly referring to it as a "vibe-cession" that doesn't fit with the current data or modeled forecasts. History, common sense, and even econometric math isn't on their, or the data's, side. All of those say unemployment is about to surge. Eurodollar University's Money & Macro Analysis Washington Post Why We're Gloomier Than The Economy https://www.washingtonpost.com/wp-dyn/co...
Aug 20, 2024•19 min•Ep. 860
Revisions are a normal part of high frequency data. Constant, near-exclusive downward revisions are not. Rewrites should be more evenly distributed which means these stats are overstating the economy. Plus, the problem is spreading hitting retail sales and IP as well as payrolls. While everyone went nuts over retail sales, the problem with July's number isn't just the likely downward revision. Eurodollar University's conversation w/Steve Van Metre Bloomberg Fed’s Goolsbee Says He’s Growing More ...
Aug 19, 2024•18 min•Ep. 859
Financial volatility. Recession conditions. Lower growth and inflation. The rate cuts are still coming. So, that means interest rates around the world are about to go...UP? The fundamentals haven't changed - the calendar has. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
Aug 18, 2024•17 min•Ep. 858
Steel prices are plunging, down a quarter since May at lows not seen since 2016. The chairman of the world's largest producer just said he expects it to get much worse in terms of prices and for industry. The implications are far broader than steel or China. Eurodollar University's Money & Macro Analysis Bloomberg World’s Biggest Steel Producer Warns of ‘Severe’ Industry Crisis https://www.bloomberg.com/news/articles/2024-08-14/china-steel-industry-in-crisis-as-baowu-warns-of-severe-winter B...
Aug 16, 2024•17 min•Ep. 857
This was supposed to be all about "inflation" and instead everything is coming up jobs - including the latest CPI report. From Home Depot's most recent admission to now US refiners taking drastic steps to avoid getting caught with an energy glut (yep, that's right), the entire economy flipped from "sticky inflation" to Uh-Oh over employment. Eurodollar University's Money & Macro Analysis Bloomberg It’s Inflation Week in the US. But Everyone’s Talking About Jobs https://www.bloomberg.com/news...
Aug 15, 2024•18 min•Ep. 856
While the world was distracted by US recession provoking a Japanese stock market crash, China was continuing to meltdown. In just the past few days the country reported: a record drop in foreign money fleeing China; the first contraction in bank lending to the real economy in nineteen years; record low market interest rates; and the PBOC going off the rails trying to derail that bond rally. And we thought China was in rough shape...last month. Eurodollar University's Money & Macro Analysis B...
Aug 14, 2024•19 min•Ep. 855
How in the world does sudden fear over a US recession lead to a crash in Japanese stocks? Even more important, what might that crash suggest about the US recession? Our world is more interconnected than you've been led to believe. Our entire economic worldview is oriented around national groupings not because that’s the way the world works but because it keeps central bankers in a job. What globally synchronized is telling us now is that job losses are going to painfully rise - ours, not theirs....
Aug 13, 2024•19 min•Ep. 854
After a chaotic, somewhat panicky prior week, the talking points went out with a clear aim to restore calm. That meant downplaying every last concerning development, starting with Jeremy Siegel. Sure enough, he played along and on it went from there. Even Fed officials know what's coming yet they'll keep denying anything's wrong right up until the first emergency meeting rate cut. Eurodollar University's conversation w/Steve Van Metre CNBC Jeremy Siegel backs off on calls for the Fed to do an em...
Aug 12, 2024•19 min•Ep. 853
Though calm was restored after a wild few days in global financial markets, key market signals remained steadfastly negative. One of the most crucial of those even dropped to a level we've only seen three other times in more than 35 years - all three some of the worst cases. Moreover, that one was corroborated by a record low for swaps also set this week. Eurodollar University's Money & Macro Analysis CNN Money Fed explains the big rate cut https://money.cnn.com/2007/10/09/news/economy/fed_m...
Aug 11, 2024•18 min•Ep. 852
Last week, the markets and the media melted down over well-founded recession fear. This week, in the aftermath, everyone will say it was all overblown. That's just normal. Meanwhile, the actual recession continues to progress and the data keeps showing momentum is all on that side. This includes yet another signal strongly correlated with unemployment. If that wasn't enough, yet more warnings from leisure and travel companies. Eurodollar University's Money & Macro Analysis CNBC Everyone is t...
Aug 09, 2024•19 min•Ep. 851
The date July 11 keeps coming up in a lot of different markets, starting with stocks. The Nikkei's last all-time high was on that day and so was the NASDAQ's. But July also features prominently in commodities and even Treasuries. The reason for it confirms so many suspicions about what just happened this past weekend therefore what it means going forward. Eurodollar University's Money & Macro Analysis BLS June CPI https://www.bls.gov/news.release/pdf/cpi.pdf https://www.eurodollar.university...
Aug 08, 2024•18 min•Ep. 850
When even big-name mainstream Economists are begging the Fed for emergency rate cuts, you might already have the sense this wasn't just a one-weekend show. US recession scrambles a lot of fundamental perceptions and values, causing a substantial and sizable repricing across asset classes. That repricing just happened to be most obvious and violent in Japan. Eurodollar University's Money & Macro Analysis Paul Krugman X https://x.com/paulkrugman/status/1820426175031673269 CNBC Wharton’s Jeremy...
Aug 07, 2024•18 min•Ep. 849
Japan was the epicenter for a wave of liquidations in smashing financial markets all over the world. It had all the telltale signs of a collateral and margin call. This wasn't about Japanese banks or even Japan, rather the sudden realization over the US soft landing narrative going up in smoke triggered a monster repricing and revaluation. So, what does all that mean? Eurodollar University's Money & Macro Analysis CNBC Japan’s Nikkei logs worst day since 1987 Black Monday crash https://www.c...
Aug 06, 2024•19 min•Ep. 848
