The European Central Bank held interest rates steady for the second meeting in a row, as it revised its growth forecasts lower and announced plans to shrink its balance sheet
ECB's Lagarde: We did not discuss rate cuts at all BUT markets price in 5.3 cuts for 2024. “The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary,” it said in a statement. Source: Bloomberg, CNBC
What a journey for Ireland...
Ireland has experienced unprecedented growth in prosperity in recent years. GDP per capita is now almost $100k, which is more than twice as much as in Germany and three times as much as in Italy. The small country with a population of 5 million has benefited from the large investments made by tech giants, who have settled here b/c of the low tax regime. No other country in Europe has a meaningful budget surplus, can set up 2 sovereign wealth funds, (Future Ireland Fund (FIF) and a smaller Infrastructure, Nature and Climate Fund (INCF) and has a war chest of €2.5bn before 3 important elections. Source: Bloomberg, HolgerZ
The Fed is still behind the curve...
The market is now pricing in a Fed Funds Rate of 3.8% by the end of 2024, expecting significantly more easing than the Fed's projection of a move down to 4.6%. Source: Charloe Bilello
David Marcus, Former President of PayPal & Co-founder and CEO of Lightspark, on FASB officially adopting Fair Value Accounting for bitcoin:
“You may think this is a small accounting change that doesn’t mean much. It’s actually a big deal. This removes a large obstacle standing in the way of corporations holding Bitcoin on their balance sheet. 2024 will be a landmark year for BTC.” Source: Swan Media
Big move down in Treasury yields yesterday after the FED projected 75 bps of rate cuts in 2024...
1-Year: 4.94%, down 55 bps from Oct high. 2-Year: 4.46%, down 73 bps from Oct high. 10-Year: 4.04%, down 94 bps from Oct high. Source: Charlie Biello
Uranium 16-Year High 🚨: Uranium has now surged past $85 per pound for the first time since January 2008
Source: Barchart
Up the mountain and back down in the valley
Here's a look at the year-over-year percentage change of PPI (producer prices) ex food & energy over the last five years. Core PPI is back down to 2% for the first time since January 2021 after topping out at 9.7% in March 2022. Source: Bespoke
Gold and digital Gold (aka Bitcoin) seem to enjoy Powell dovishness and dollar weakness
Gold gained 2.4% following dovish Fed meeting, Bitcoin gained almost 5%. Source: HolgerZ, Bloomberg
