Entries by Simon Lack

Life Without The Bond Vigilantes

“The Fed’s an inflation creator, not an inflation fighter.” So said Paul Tudor Jones last week in an interview on CNBC. It’s doubtful that charge has been leveled at the Fed in at least half a century. William McChesney Martin ran the Fed for almost 19 years (1951-70) during a period that set the stage […]

Pricing In A Less Dovish Fed

Bond yields have drifted up 0.25% over the past month. Real yields on TIPs have barely budged from around –1%, so the move in bonds has translated into rising inflation expectations — now solidly above 2.5% for the next decade. The persistence of negative real yields is surprising – with the Fed likely to finally […]

Inflation Edging Higher

Yesterday the IMF warned central banks around the world to be “very, very vigilant” about inflation. The Fed and its peers employ legions of economists and it’s doubtful the IMF will have triggered a sudden reassessment in marble halls in Washington, Frankfurt or Tokyo. But their outlook will add to the growing concern investors have […]

The Global Energy Crisis

The global energy crisis is becoming the biggest investment story of 2021. US consumers are uniquely unaffected so far by spiraling prices for natural gas and coal. Crude oil continues to cause some discomfort at the White House, which regularly pleads with OPEC to offset their own policies by increasing supply. Limited export capacity for […]

Deciphering the FOMC’s Tea Leaves

Last week’s FOMC meeting for once gave the market something to ponder. The $120BN of monthly bond buying looks set to taper before the end of the year, and to be down to zero by next summer. Fed buying of mortgage-backed securities has been especially superfluous, as shown by the red-hot housing market. The market […]

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