OUCH! UK 10y yields rose as much as 14bps to 4.82%, highest since Aug. 2008
Source. HolgerZ, Bloomberg
FOMC Minutes Show 'Almost All' Fed Members See Higher Inflation Risks, Cite Trump Policies
👉 RATE POLICY: — A 25bps rate cut was broadly supported, with the majority favoring a cautious approach to further easing. — Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters — Some participants noted it might be prudent to pause rate cuts if inflation readings remain above target or economic momentum persists. — A few officials highlighted potential scenarios to accelerate cuts if inflation trends lower or labor market softens more than expected. — Many emphasized the importance of carefully assessing the neutral rate and moving gradually to avoid policy missteps. 👉RISK OUTLOOK: — Inflation risks remain balanced, though higher-than-expected recent readings warrant close monitoring. — Labor market risks were deemed manageable, with no rapid deterioration expected. 👉ECONOMIC CONTEXT: — Inflation progress has slowed but remains on a downward path; core PCE inflation was noted at 2.8% in October. — Labor market conditions have eased slightly, but unemployment remains low at 4.2%. — Participants expect solid GDP growth to continue, though some noted financial strains for lower-income households. 👉BALANCE SHEET AND TECHNICAL ADJUSTMENTS: — Continued reduction in Treasury and mortgage-backed securities reaffirmed, with caps set at $25B and $35B per month, respectively. — Discussed adjusting the overnight reverse repo (ON RRP) rate to align with the bottom of the federal funds rate range. 👉 ADDITIONAL NOTES: — Fed emphasizes data-dependent decision-making, balancing risks to inflation and employment. — Gradual easing remains the likely path, with flexibility to adapt if economic or inflation conditions shift. - source: Wall St Engine @wallstengine
Quantum computing stocks crash after AI godfather Jensen Huang exploded the quantum computing bubble with 3 lines:
"If you said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30 is probably on the late side. But if you picked 20, I think a whole bunch of us would believe it." Source: HolgerZ, Bloomberg
BREAKING: Prediction markets now see inflation rising as high as 4.1% in 2025.
Heading into 2025, expectations showed the inflation rate peaking at 3.6% in 2025. Prediction markets are saying inflation is back. Source: The Kobeissi Letter
YELLEN: "FISCAL POLICY NEEDS TO BE PUT ON A SUSTAINABLE COURSE"
As a reminder, Mrs Yellen was Fed vice chair and chair from 2010 to 2018 and has been treasury secretary since 2021. On an aggregate basis, she has been directly overseeing and presiding over a $15 TRILLION increase in US debt... Source: www.zerohedge.com
Probably nothing
Source: Bianco Research L.L.C.
Should we get prepared for a choppy quarter???
The S&P 500 has gained ~1.0% on average in the first quarter after a US presidential election since 1950. It also historically comes with elevated volatility as market swings widen to both directions. On average, the first year of a new presidential cycle has seen an 8.2% average return. Source: The Kobeissi Letter, J-C Parets
Believe it or not, retail ETF gold flows continued to be negative on a net basis last year.
Source: Bloomberg, The Methodical Investor
