I’m a little burned out today because I have just finished writing a historical novel which has been keeping me up at nights. When I’m on a project I’m like an addict and can’t stop myself. I finally pushed the button and put it on Amazon.com as a Kindle book. The story is that I have 0.1% of East African DNA in my 99.9% Ashkenazi DNA. Apparently dating back to the mid-1700s. How did that happen? Therein lies a tale!
In a nutshell, Secretary of the Treasury undermined the long-term Treasury market by trying to manipulate the yields lower - the opposite of what he wanted. He started buying 30 year Treasuries with short-term T-bills which is revenue neutral.
Fed Chair Kevin Warsh is setting up committees, one of which is aimed at “reappraising” the calculation of CPI. Since the TIPS yield is adjusted with CPI, any move to suppress the reported CPI threatens the interest paid on all TIPS, especially long-term. Traders are avoiding them. As a result, that jawboning has led to a spike in TIPS yields which will probably go higher.
That’s not even including the out-of-control fiscal deficit.
This is the opposite of the traditional flight-to-safety of Treasury bonds since investors don’t think they are safe anymore.
The rise in long-term bond yields is bad for business as well as government, mortgage buyers, etc.
Gold, silver and oil are spiking. Bitcoin is going nuts after months on the floor.
The Fear & Greed Index is neutral.
The METAR for next week is sunny. But strange things are happening under the surface.
Wendy