For the last few decades we have been in a low interest rate environment where deficit spending would not cause major issues, however 40-year high inflation prompted the Fed to tighten monetary policy, raising rates fast by large sized hikes. Higher rates means the cost of US debt will quickly explode higher. ... Read More
Forward curves tell us what is priced in and what is expected. But, they do not tell us what may actually happen.... Read More
Until the Fed gives some indication that inflation is not a priority, growth will slow, a recession is very much a possibility, and the Fed will remain aggressive in hiking rates.... Read More
Client Question for team Bianco: What is Arbor’s view on fed funds rate vs. The 2yrs given that the expected terminal rate is between 3 and 4%… In other words, how high will the 2yr go? Jim Bianco: First the... Read More
A look at outstanding amounts of Treasuries, corporates, agencies, munis and open market paper... Read More
The amount of outstanding private credit in the U.S. experienced a brief decline during the financial crisis, but government debt grew throughout the entire period. Both are now at new highs.... Read More
Private pension funds have much smaller funding gaps than their government counterparts.... Read More
Defined benefit plans continue to be replaced by IRAs and defined contribution plans.... Read More
A home may be the biggest purchase most people make in their lives, but households' home equity is actually surpassed by households' direct stock ownership.... Read More
Over 46% of FDIC deposits in the U.S. are uninsured.... Read More
The S&P 500 officially entered bear market territory yesterday. The relationship between bear markets and recessions is not what many might expect. Has the recession already started?... Read More
Going into Friday's CPI release, we noted 33% to 40% of the investment community still believed inflation was transitory. In other words, inflation's potential to drag down risk markets was not fully priced in. Friday's CPI killed the transitory hope and we are now seeing the effects of the remaining believers capitulating as a result.... Read More
Long-term commodity investors have profited from backwardation over the past year, adding to total returns to a degree rarely seen.... Read More
First-time homebuyers enjoyed a relatively affordable market in the decade following the housing crash. The recent rise in prices and mortgage rates has brought that to an end.... Read More
Last week we heard several individuals express concern over where the US economy was headed. Amid these negative outlooks, traders do not seem positioned for a severe downturn in the economy.... Read More
The economy can fall off a cliff, but if we continue to see positive job growth, the Fed will keep hiking until inflation stalls.... Read More