💥 Treasuries surge as traders bet on emergency Fed rate cut 💥
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Bonds have surged higher with the collapse in interest rates and the US Aggregate Bond ETF is now up 7.7% over the past year, outperforming the Treasury Bill ETF ($BIL +5.4%)
Source: Charlie Bilello
What a chart...
Source. Michel.A Arouet, Ht @MacroKova, Convera, Macrobond
Should the FED wait for a financial accident to happen BEFORE cutting interest rates?
Source chart: Mac10
As highlighted by Otavio (Tavi) Costa, the need for the FED to cut interest rates is not driven just by labor data and inflation.
As shown on the chart below, the costs of servicing Federal debt in the US is soaring more than in any other country. Not just once, not twice, or even three times — multiple rate cuts would be needed to bring US interest payments as a percentage of GDP in line with the rest of the world. This is what financial repression is about. Source: Tavi Costa, Bloomberg
Loose policy = Bull market
Even if the BOJ hikes a few more times, real rates will remain deeply negative, a sign of accommodate policy. Chart tracks Japan real rates & market performance ➡️ 2009 -2013: period of high real rates, languishing stock market🔻 ➡️2013-2021: BOJ floors rates, pushes rates negative and fuels stock rally ✅ ➡️ 2021-2024: inflation picks up, real rates drop even further negative, Topix rallies 50% ✅✅ Source: David Ingles, Bloomberg
JUST IN 🚨: There is now a 100% chance of a 25 bps interest rate cut by September, according to CME FedWatch
Source: Barchart
Bulls praying to Lord Powell for a rate cut next week
Source; Barchart
