BREAKING: The Federal Reserve just reported a $19.9 BILLION operating loss in Q3 2024 up from $16.9 billion in Q2.
This marks the 8th consecutive quarter of operating losses for the central bank. As a result, cumulative operating losses reached a massive $210 billion over the last 2 years. This comes as the Fed has been paying hundreds of billions in interest to banks and money market funds. At the same time, income the Fed has earned on Treasuries and Mortgage-Backed-Securities has declined. Source: The Kobeissi Letter
US Fed officials see interest rate cuts ahead, but only ‘gradually,’ meeting minutes show - CNBC
Federal Reserve officials expressed confidence that inflation is easing and the labor market is strong, allowing for further interest rate cuts albeit at a gradual pace, according to minutes from the November meeting released Tuesday. The meeting summary contained multiple statements indicating that officials are comfortable with the pace of inflation, even though by most measures it remains above the Fed’s 2% goal. With that in mind, and with conviction that the jobs picture is still fairly solid, Federal Open Market Committee members indicated that further rate cuts likely will happen, though they did not specify when and to what degree.
It has been a very quiet year... Can we expect the same in 2025??? (Clone)
Financial conditions are now even easier than previous records seen in late 2020 and 2021. In fact, this makes financial conditions easier than when the Fed cut rates to near 0% overnight in 2020. Meanwhile, the market is pricing in a 59% chance of another 25 bps Fed rate cut in December. Source: The Kobeissi Letter, Bloomberg
Higher than expected US PPI + Powell's remarks yesterday sent rate-cut expectations notably lower - December less than 50-50 now...
Source: Bloomberg, www,zerohedge.com
Has J Powell handed Trump a ticking time bomb?
By prematurely cutting rates by 50 bps ahead of the election, even with inflation still running above target, the Fed has set the stage for an inflationary resurgence. The latest October inflation data released yesterday confirmed the trend, with PPI coming in at 2.4%, hotter than the expected 2.3% Meanwhile, core PPI rose to 3.1%, ahead of the expected 3.0% increase The bond market starts to price in this risk, with 10-year Treasury yields up nearly 70 bps since the Fed's began cutting overnight rates in September Rising borrowing costs will become a major headwind for Trump's pro-growth, and likely pro-inflationary, fiscal policies. And it could soon become a major problem for equity investors paying a near record high 28x (TTM) earnings in today's stock market. Source: Porter Stansberry @porterstansb on X, Marketwise,T
It seems that the FED's neutral rate is higher.
Are they going to throw the towel on the 2% target? Source: Bloomberg, Lawrence McDonald
Fed cuts rates by 25bps in unanimous decision as expected. So what did the Fed do?
👉 FED LOWERS BENCHMARK RATE 25 BPS TO 4.5%-4.75% RANGE 👉 FED SAYS RISKS TO GOALS REMAIN 'ROUGHLY IN BALANCE’ 👉 FED: LABOR MARKET CONDITIONS HAVE 'GENERALLY EASED' No dissent on this rate-cut decision. 🚨 Key changes: - Most notably, removing language that Fed has "gained greater confidence that inflation is moving sustainable toward 2 percent". - Adding that labor market conditions have "generally eased" since earlier in the year, replacing "job gains have slowed". Source: Bloomberg, www.zerohedge.com
THIS IS AN ABSOLUTELY WILD MOVE >>>
The 30-year US Treasury jumped by a massive 22 basis points, the biggest spike since the COVID CRISIS. At the same time, the 10-year yield jumped by 16 basis points, to the highest since July. Meanwhile, the Fed is going to cut today.... Source: Global Markets Investor
