Federal Reserve Balance Sheet Update ⚠️DECREASE of $47.1 billion week ending Jan 31st⚠️ ▫️ $1.34 Trillion Reduction since Apr 2022 ▫️ We are $0.436T away from the long term trend line (Red Line). The current trajectory means we could reach this level by Sept 2024
When central banks raise rates, financial sector outperforms. That is until credit crumbles by which time all bets are off. As federal funds rates spike and stay elevated for longer, lending rates will climb higher relative to deposit rates. Net Interest Margin ("NIM") which is the difference between lending and borrowing rates continues to favour financial...
Famous American Author Alfred Paul Ries once said, “Good things happen when you narrow your focus”. Global macro conditions and monetary environment could make that quote apt for US equity market investing too. Given the backdrop of price behavior, this case study argues that a spread trade comprising of Long Dow Jones Index and short S&P 500 index provides a...
Hi there! So, I heard that the economy is in a bit of a rough patch because the FED is raising rates, there's some quantitively tightening happening, and there's a potential recession on the horizon due to a supply shock from the Russia-Ukraine war and China's pandemic restrictions. It looks like we might be heading into a recession, which is sooo not good news....
Macro conditions couldn’t be any worse. Starting this month, the Fed unleashed its quantitative tightening (QT) plans, trimming the $9trillion balance sheet at an unprecedented scale (current run-off cap: $47.5bn/month initial; $95bn/month 3 month later; 2017 run-off: max $50bn/month). The last two quantitative tightening led to a sharp rise in yields in 2013 and...
Here is great high interest rate hedge. While I wanted to use USINTR to compare, it didn't look obvious for easy analysis, so I used USIRYY instead since both are greatly correlated. The Fed keeps talking like a dove but acting like a hawk: like promising soft landings from transitory inflation, yet suddenly choosing rare 75 bps increase, even though they...
Hot take: we see a crash all the way back to mid-covid lows / pre-covid prices. Get ready for 300$ TSLA, 8000$ BTC, 400$ ETH. (That’s about the price level where this bearish divergence started from the QE fed infinite money printing machine….. wildly dubious speculation to be sure definitely not advice DYOR) What do you guys think?
BTC has followed a descending parallel channel since Nov 2021 ATH shedding >52% in late Jan to.$32.9k. Since the low, BTC rallied to a local high of $48k in late March before resuming the gradual mark-down. Currently sitting >40% from ATH @ $38.8k. Bitcoin Weekly Chart currently above 100 EMA while the 20 EMA has crossed below the 50. Previous FOMC in early...
The red line is the federal reserve balance sheet, total assets. Most of the rallies since the January high have been during weeks where the fed has temporarily stopped shrinking its balance sheet. Another shrink was disclosed late on 26 June. The fact that the sell off occurred after the disclosure, rather than the shrink itself suggests investors are trading the...