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Economy

FED Balance Sheet Expansion: Asset Purchases to Continues?In this chart analysis, i'm exploring the potential trajectory of the Federal Reserve's balance sheet, considering the possibility that asset purchases will continue until reaching the $13T-$16T range. Historical events like the 2008 financial crisis and the 2020 pandemic have demonstrated the central bank's willingness to expand its balance sheet to support the economy. Starting with the 2008 financial crisis, the Fed implemented several rounds of quantitative easing (QE) to inject liquidity into the financial system and stabilize markets. This caused a significant expansion of the balance sheet from around $1T to approximately $4.5T by late 2014. Fast-forward to the 2020 pandemic, the Fed employed a similar approach, launching aggressive asset purchase programs in response to the unprecedented economic shock. This led to another massive surge in the balance sheet, which currently stands at over $8T. The chart indicates a steady upward trajectory in the Fed's balance sheet, with the possibility of reaching the $13T-$16T range in the medium to long term. This scenario assumes that the central bank will continue to buy assets in response to economic uncertainties, inflationary pressures, or future crises. For traders, this ongoing balance sheet expansion may have implications for various asset classes, including equities, bonds, and commodities. A continuously expanding balance sheet could support risk assets and suppress interest rates in the short term. However, concerns over inflation and potential policy tightening may create headwinds over the long term. In conclusion, the Fed's balance sheet growth highlights its active role in managing the economy during turbulent times. Traders should monitor the central bank's policy decisions and anticipate potential market reactions to shifts in the balance sheet trajectory. Cheers! Kripti.
FRED:WALCL
by kripti
We've been in a recession since 1997Hello friends. Here is an interesting observation. When you adjust the United States GDP numbers by the United States M2 Money Supply (Supply of dollars), it turns out that it has been dropping substantially since 1997. This means that adjusted for the abuse of the dollar, US GDP has been falling for the past 26 years! It seems logical to make this kind of adjustment since when we have more money, the GDP will obviously rise, but that doesn't mean that there has been actual growth. It turns out most of our economy's growth was really just money printing, and there has not been enough innovation in recent decades to cause some true growth that outpaces the printer. At this time, we would need the GDP to proceed at a breakneck pace of around 10% per year in order for the GDP to simply stay flat with the money printer. We think this won't occur any time soon, and the recession will continue right up until superintelligent AI is developed which will bring about so much innovation that GDP may finally outpace debasement.
FRED:GDP
by bowtrix
3
The Fed's Pivot - What to Expect in the Months Ahead In this video, I explain what to expect in the months ahead, following the Fed's pivot back to monetary easing. Also, I wanted to make several notes: When I said that it's almost never better to own derivatives than holding an asset outright, I do realize the importance that derivatives can play with leverage and risk management. When I said that fear is always highest at the +2 standard deviation of the log-linear regression channel, this was confusing because typically fear is highest when price reaches the -2 standard deviation. In this particular ratio chart, fear over the Grayscale Bitcoin Trust was highest when Bitcoin outperformed it enough for the BTC/GBTC ratio to reach the +2 standard deviation. When I said that the log-linear regression channel is one of the best indicators, I do realize that compared to other statistical methods, this indicator is quite rudimentary. Nonetheless, I find it to be quite useful. I apologize for the poor audio, this seems to be a matter of how TradingView is uploading my audio. On my end, my audio is very clear. Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
FRED:WALCL
by SpyMasterTrades
38
The Jobs MarketSee how working age population leveled off ~200M and job openings up top sky rocketed. Boomers retired and died form Covid. It's not gonna recover any time soon. Population is gonna shrink along with tax receipts. Meanwhile spending will only increase. The U.S. Treasury and Federal Reserve have been calling it an "Unsustainable Fiscal Path" since 2018 at least. It's even the title of the Treasury's annual report. www.fiscal.treasury.gov Only 1.7M claiming unemployment and seeking jobs for 10.8M job openings.... another 4M working gig jobs and day-trading, not interested in the full-time job market. It's a seller's market that will continue to drive wages and inflation up until the market breaks and causes a massive recession/depression. We're not gonna grow an extra 5M-9M qualified, highly experienced workers over the course of a year or 5. Those job openings are gonna close because the businesses are not doing well.
FRED:JTSJOL
by Nicklaus68
1
🏆🖨️💰 When the Champions of Inflation hate Bitcoin 🌴 ₿🌴👨🏽‍🦳💪 Dan Peña has made a name for himself as a successful entrepreneur, investor, and business coach. However, he has also been a controversial figure, with some of his opinions and actions drawing criticism. 🌴 ₿🌴 One example is his stance on Bitcoin, which he has publicly stated will go to zero. While many experts and investors believe that Bitcoin has the potential to revolutionize the financial industry, Peña has been highly critical of the cryptocurrency. He may not fully understand or appreciate the unique features of Bitcoin, such as its deflationary nature nor does he seem able (or willing) to navigate a rapidly changing economic landscape. 🏆Now let's dive into how this 'CHAMPION OF INFLATION' has created his legacy: 🥁Dan Peña has created jobs and achieved great success through his bold and unconventional approach to business. However, his success has not come without consequences, and I tend to think that Peña's activities have contributed to both inflation and environmental degradation. 🏗️🏢🌇🏢🏭 One of the ways the many Peñas has contributed to inflation is through investments in the real estate market. By investing in properties and then selling them at higher prices, Peña has been able to generate significant profits. However, this has also led to higher property values, which can make it more difficult for middle-class families to afford homes. In turn, this can lead to inflation as the cost of housing and other goods and services rise. I think you should agree.... 🏦🏧🖨️💸💰💰💰💰💰💸 Dan Peña is the GURU of loans. A true LEGEND in borrowing. A Legendary contributor to Printing and Inflation. Could had been nominated for the 'Federal reserve Client of the year' award. ☞Hear it from the man himself: www.youtube.com 🤦 Simple: Loans means printing = Inflation (on steroids....) ⛽🛢️🏭🚢☢️☠️ Peña's activities in the oil and gas industry have also been a source of concern. While his company, Great Western Resources, was successful in producing oil and gas, it also contributed to pollution and environmental degradation. Oil and gas production is a known source of greenhouse gas emissions and air pollution, and it can also have negative impacts on local ecosystems and wildlife. He doesn't seem like the 'Go green guy' to me (probably still drives Diesel). 🆗👍 While Peña's success in business cannot be denied, it is important to recognize that his activities have had real-world impacts on Inflation and the environment . As such, it is crucial that we consider the long-term consequences of business activities and work to minimize any negative impacts. By doing so, we can create a more sustainable and equitable economy that benefits everyone. In conclusion, Dan Peña's success in business has come at a cost, and he can be seen as a case of ''Inflation impersonated'' and environmental impact. While we should celebrate the achievements of successful entrepreneurs, we must also hold them accountable for their actions and ensure that their activities do not harm society or the planet. 🏆👨🏽‍🦳💪 Dan Peña, I hereby honor you with the Title of '🏆CHAMPION OF INFLATION🏆. May you have only great days forth and may your children and grandchildren understand and fix any damage that you have caused to the Economy and the world. For sure you been buying Bitcoin lately despite what you say. One Love, The FXPROFESSOR ps. It is important to note that Peña's activities in the oil and gas industry may have also had positive economic impacts, such as creating jobs and generating revenue. However, it is crucial to balance these benefits against the potential negative impacts, such as pollution and inflation, and to implement policies and regulations to mitigate any negative consequences. As we navigate a rapidly changing economic landscape, it is important to remain informed, open-minded, and committed to building a more sustainable and equitable future for all.
FRED:CPIAUCSLLong
by FX_Professor
6
U.S. Case Shiller Home Price Index in contraction?As you can see from the Monthly Chart, U.S. Case Shiller Home Price Index could experience an interesting price contraction in short-medium term, could this also be a clear sign of a potential economic contraction, recession? If this happens, we shouldn't be surprised, the Fed is doing everything to fight inflation in the United States... Trade with care! 👍 ...and if you think that my analysis is useful, please..."Like, Share and Comment" ...thank you! 💖 Cheers! N.B.: Updates will follow below
ECONOMICS:USCSHPI
by TheAnonymousBanker
3
A Look at the Turkish EconomyAs we all know, the increase in foreign currency increases the general product prices extraordinarily, as it increases the input costs. The rise of the foreign exchange is a phenomenon that a country does not want. Every country aims to keep the exchange rate stable. But for some reason, Turkey came out of these countries. As can be seen from this chart, from 2006 to 2020, Turkey continued to print money with a certain pattern. This is an acceptable factor for each country under certain conditions. The money supply, which increased with a trend of 23 degrees, started to rise more sharply after 2020, and especially after March 2021, the trend reached 53 degrees. This trend change is a clear indication of how fast the printing of money is. Therefore, as the money supply increases, there is a natural depreciation of the currency (Orange line shows the rising Dollar against the Turkish Lira). In the same period, interest rates were reduced, as can be seen from the black line. By lowering interest rates, what a country normally aims at is to create consumption demand by reducing borrowing costs. Therefore, the demand for consumption has increased, and with it, demand inflation has arisen. Meanwhile, printing money decreased the value of the Turkish Lira (the exchange rate rose), which increased the input costs. The increase in input costs was reflected in the sales prices of the products. Therefore, inflation was fueled by both demand and foreign currency. It will be impossible to know why the Turkish government did this, why it deliberately ignited inflation, which no economist can explain. If you have an idea, you can write it in the comments. Thanks.
ECONOMICS:TRM2
by YavuzAkbay
1
The Bear Party Hasn't Even Started YetEvery major crash in modern history came after rate hikes completed. Either during the plateau or during the first cuts. No bulls can explain how we're going to avoid that fate this time. We hiked twice as fast as 2007 and 2018 hikes, yet somehow there's gonna be a soft landing? Yeah right LOL It's already looking like a broadening wedge like 2000; and about to break the 13yr trendline for the first time since 2020. See inflation chart below: Worst case scenario(red), we get rapid deflation that causes a 6 month bull run at first, but ends with devastating crash. Like 2019, however we can't afford to write more stimulus checks. So there will be a depression, not a recession. No V recovery. Best we can hope for is more inflation(yellow); so the government can try and print it's way out of debt. Chop sideways roughly -50% +100% for a decade or more. Pipe dream is green, the Fed managing to thread the needle and get inflation between 0-3% for years to come. All while the U.S. Treasury manages to service it's interest payments, despite failing to close the gap between tax receipts and spending. This is not going to happen. It's physically impossible to produce 5M qualified workers overnight to fill the gap between job openings and job seekers. Layoffs won't help either. By then the recession is in full swing. Higher taxes coming as well. Growth is dead.
FRED:EFFRShort
by Nicklaus68
4
Inflation (CPI) - A Battle Already LostInflation ( CPI ) - A Battle Already Lost I've recently shared my outlook on CPI and where I think its headed in the months ahead but after further review, it seems that I've previously overlooked certain signals which should have altered my perspective in a way that it did not. Based on discovery of those signals, I have now updated my anticipatory CPI chart to highlight certain levels of interest. As we can see on the wavemap, the Consumer Price Index (a measure of inflation) has broken above its 40+ year bearish trend line. The breakout was very strong and should be considered as very significant. The format of the wave during this breakout has developed as what seems to likely be a zig-zag formation. Noticeably, the upside zig-zag wave has retraced 90% of the 40 year long bearish drawdown. Therefore, leaving little probability of it being a truly corrective wave. Aside from the macro bear trend-line, I have also highlighted the newly respected bullish trend-line. Finding resistance near 6.77, Fibonacci measurements suggest that the pending action will fall to retest the former price containing trend line and maybe even drop below it. Specifically, Elliott Wave Theory suggests that 0.99-1.01 should be the downside target range. Over the past 20 years, this level has also supplied nearly unbeatable support. If support is once again discovered near 1.00, the currently active wave could then be sent to retest the red bullish trend, at a level near 9-10. Ultimately, completion of the blue diagonal will signify that the CPI (and inflation) area headed for upside levels that the American economy has never witnessed. Personally, I believe that inflation is a byproduct of capitalism and there is no true containment possible. The next decade will prove to show if this is on point or simply farce.
ECONOMICS:USCCPI
by DigitalSurfTrading
Inflation takes timeInflation has come down from its (FOMC QE, covid legislation, geopolitical unrest) peak. But how long will it take to get back to its baseline since (FOMC QT, divided congress, geopolitical containment) started? Well let's see what the USIRYY chart has to say. USIRYY was 2.6% for March 2021 & peaked in June 2022 at 9.1% so that upside move took 14 months to show up on the chart. But since it was a delayed reaction from the macroeconomic factors that started from covid March / April 2020, that equals 12 months for monetary stimulus to work its way through everything. So, by using simple arithmetic, inflation could come down to its baseline as soon as 13 months from June 2022. Which would mean that at its earliest, USIRYY gets back to its 100 - 200 month moving average by July 2023. Obviously, it seems like it will take a few months longer, but inflation will definitely get back to 3% in 2023 at the very worst. USIRYY 1 month chart moving averages: SMA100 = 2.71% SMA200 = 2.42%
ECONOMICS:USIRYY
by Options360