Fed rate expectations

See post #40 above, rising bond yields are normally bullish for the USD so you may well have to jump back into the bullish camp for 2025.

 

Looking set in stone.



Source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

 

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

 

The wheels are turning??

I'll be watching the 1 May - 30 June time period closely for a possible Fed/Trump Put.

 

That's pretty much what Joseph Wang was saying in January.

I wouldn't expect a cut in May, but June could pose a different story.

 

Someone's fat arse played "whoopee cushion" with the target rate probabilities:

 

A week is a long time:

 

The market believes that JPow is not flinching yet:

 

Donny checking the CME's "Fedwatch":

 

Joseph Wang's summary of today's FOMC meeting:



Key takeaway, JPow considers the current hard data to be solid so he won't act until that raises alarm bells. He's afraid of stagflation and that the policies of the government pose a wide array of risks that haven't played out as of yet. So he's not moving yet and is committed to being late. Wang focuses on the labour market a fair bit which suggests that that's going to be Powell's barometer in the future.

Jack Farley from The Monetary Matters Network also has a new video out reviewing today's FOMC meeting. I'll post a brief summary below once i've listened to it.

 

In the end the OCR just sets the price for the bond market.

Asset price inflation has more to do with liquidity (and government departmental policy in a whole host of other areas) than what the cash rate is set at and I think it's these policy decisions that are eroding the social structure.

So on the one hand you've got departmental policy creating a host of issues in the community, while on the other you've got deliberate RBA monetary policy working in the opposite direction in an attempt to combat the fallout from those political decisions.

Together, both policy directions end up driving up the cost-of-living. Clearly neither policy is working.

 

Australian mean housing prices v cash rate:



Source: Trading Economics

 

Yep. Monetary policy has been the main tool wielded over the past 50 years or so.

I think we're on the verge of a change in the dominant paradigm though with a renewed focus on fiscal policy to become dominant. Kind of like a return to a more Keynesian focus as opposed to the Neoclassical or Monetarist policies which have been dominant since about Friedman's time.