Syz the moment

According to Harvard University, half of all renters in the United States are paying more in rent than they should. That is defined as using up more than 30% of your income. The good news is rent is coming down in most of the country. The median asking rent is just above $1,700, which is down $63 from its peak in July 2022. That number is going to vary from city to city, but even in Manhattan, rents dropped for the first time in more than two years in November. https://lnkd.in/e_dmjidG

The Treasury said on Wednesday it would increase the size of auctions at most maturities for the next three months, with two-year and five-year auctions hitting record sizes. The five-year auction in April, for $70bn, would be the biggest ever for debt with a maturity of two years or more. The US has been increasing its borrowing over the past few quarters, as the gap between government spending and tax revenue has grown. The federal deficit stood at $1.7tn last year. Source: FT https://lnkd.in/eSyQHXu9

There is a silver lining though -> the market quickly remembered that it was precisely the bank crisis last March that sparked a powerful Fed response (BTFP), and a violent rally, and we got the same thing today as stocks slingshot sharply higher closing 1.1% higher... Source: www.zerohedge.com

Source: Grant Hawkridge

Source: Michel A.Arouet

Per Bloomberg, the Universa Investments advisor who correctly called the 2008 financial crash cast a dire warning about the US debt situation, which has seen the federal debt balance notch $34 trillion for the first time ever to start the year. As long as Congress keeps up its rapid pace of spending, those debts are going to continue to pile up, which could have disastrous consequences for the US economy, Taleb said this week at an event held by Universa Investments. In fact, rising debt in the US is a "white swan," Taleb said, and is an event that poses an obvious risk to markets versus a "black swan" event, which can occur without much warning. That death spiral would necessitate "something to come in from the outside, or maybe some kind of miracle," Taleb said, when asked how the shock would play out, adding that the situation has made him more pessimistic about the political system in the West. Source: Business Insider

In a nutshell · The FOMC voted unanimously to leave benchmark rate unchanged - as expected - in target range of 5.25%-5.5% for fourth straight meeting while making significant changes to statement · However, the statement was very much more hawkish than expected, as The Fed pushed back aggressively against the dovish market stance. Market reaction: -> The 10-year Treasury yield fell more than 7 basis points to 3.98%. The yield on the 2-year Treasury was last down about 8 basis points at 4.27% -> US equity indices are retreating. Gold is paring gains, dollar is recovering. -> Odds of a March Fed rate cut plummet from 47% to 31% after the Fed interest rate decision. Our take: The U.S. economy enters 2024 from a position of strength. For instance, the S&P PMI came in higher than expected last week. Q4 GDP growth in the U.S. came in at 3.3% annualized, well above expectations of 2.0% growth. And while disinflation is firmly in place, the inflation rate remains above the central bank target. There is thus no reason for the Fed to rush. Nevertheless, we still believe they will have to cut rates at some point for the following reasons: 1/ Keeping rates too high for too long can have long-lasting effects on US economic growth 2/ Keeping rates steady while inflation is coming down imply rising real rates. Keeping positive real rates for too long at a time when Uncle Sam is facing $33T debt and surging interest rates payments is unsustainable

Source: www.zerohedge.com