The hottest Interest Rates Substack posts right now

And their main takeaways
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Running on Empty

The Last Bear Standing • 32 implied HN points • 14 Feb 25
💰 Finance Monetary Policy Banking Liquidity Interest Rates Economic Trends
  1. The Federal Reserve's balance sheet reduction is mostly just moving money around rather than actually reducing the money supply. This means the impact on inflation might not be as significant as it seems.
  2. The Reverse Repo Facility, which helps maintain liquidity in financial markets, is running low. As it decreases, there could be less stability in short-term funding.
  3. While some people say the situation is either a disaster or not a problem at all, it's more complex. We might see tighter banking conditions and more market volatility as the Fed continues its quantitative tightening efforts.

Top Links 638 The credit card racket. Why Trump wants Greenland. The cislunar economy & the age of the gas mask.

Chartbook • 529 implied HN points • 03 Feb 25
💰 Finance Credit Cards Economy Debt Interest Rates Global Trade
  1. Credit card interest rates in the US can be very high, over 22%, which can be a heavy burden for people carrying balances. It's important to be aware of these costs.
  2. There are discussions around various topics, like why Trump has an interest in Greenland, showing how geopolitics can be tied to business and resources.
  3. The emerging cislunar economy reflects the growing importance of space and its potential impact on our economy and society, underlining how innovation stretches beyond Earth.

Not Much has Changed

The Transcript • 179 implied HN points • 15 Oct 24
💰 Finance Macroeconomics Interest Rates Consumer behavior Investment Strategies Labor Market
  1. The economy is doing okay overall, even though growth has slowed down a bit since the Fed lowered interest rates. It seems like things are more stable than expected.
  2. Consumers are still spending, and there’s no big drop in retail shopping, which is a good sign for the economy. Most people are managing to keep up with their finances.
  3. Investors are holding onto a lot of cash right now and might be waiting for better opportunities to invest. Many think current asset prices are too high.

A Quick Q&A on predicting super AI through bond markets with … Trevor Chow

Faster, Please! • 91 implied HN points • 20 Feb 25
💰 Finance Markets Interest Rates Investment Economics AI
  1. Interest rates might predict the rise of advanced AI. As people expect big changes, they want to spend more now instead of saving for the future.
  2. Higher long-term growth expectations often lead to higher real interest rates. This shows that bond markets can hint at when transformative AI might arrive.
  3. Both positive and negative outcomes of AI can push rates up. Whether AI leads to great progress or poses risks, people behave similarly by wanting to consume now.

First Rate Cut + Q&A

DeFi Education • 779 implied HN points • 23 Aug 24
💰 Finance Monetary Policy Inflation Labor Market Interest Rates Economic Trends
  1. The Federal Reserve is making changes to its policies, indicating the economy is shifting. This could affect things like interest rates and inflation.
  2. Chairman Jerome Powell emphasized that they don’t want the economy to cool down too much. This suggests they are looking for a balance between growth and stability.
  3. There is a focus on the labor market and inflation, which are key indicators for the economy. These factors will influence future decisions from the Federal Reserve.
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Lawler: Early Read on Existing Home Sales in January

CalculatedRisk Newsletter • 43 implied HN points • 17 Feb 25
💰 Finance Real Estate Market Trends Interest Rates Economic Indicators Home Sales
  1. Existing home sales are predicted to be around 4.09 million for January, showing a slight drop from December but an increase from last year.
  2. The average sale price for homes has risen about 5% compared to a year ago, indicating a continuing trend in increasing home values.
  3. The expected real interest rates have returned to levels similar to before the financial crisis, suggesting a more stable economic outlook.

USDJPY: The Most Important Chart in the World

Kerman Kohli • 118 implied HN points • 08 Oct 24
💰 Finance Currency Markets Debt Management Global Trade Interest Rates
  1. The Japanese Yen's value impacts global trade. When the Yen is weak, Japanese exports become cheaper for other countries, but imports get more expensive.
  2. Japan's massive debt isn't a problem as long as their interest rates stay low. This keeps borrowing cheap, allowing them to manage their debts without immediate consequences.
  3. The USD/JPY exchange rate is crucial for understanding the global economy. Changes in this rate can affect investments and interest rates in other countries, making it a key chart to watch.

Lawler: More Ruminations on the “Neutral” Rate of Interest

CalculatedRisk Newsletter • 47 implied HN points • 12 Feb 25
💰 Finance Monetary Policy Interest Rates Economics Federal Reserve Housing Market
  1. The current monetary policy is not tight enough to be called restrictive. This means people can still borrow money relatively easily.
  2. Tom Lawler has discussed the 'Neutral' rate of interest a lot. Understanding this rate helps us know how the economy might react to changes in interest rates.
  3. Recent comments from Fed Chair Powell suggest that the interest rate environment is still being evaluated, which could affect future economic policies.

The Fed Has Stopped Pretending that Price Inflation Is Going Away

QTR’s Fringe Finance • 23 implied HN points • 17 Feb 25
💰 Finance Monetary Policy Inflation Interest Rates Economics Government spending
  1. The Federal Reserve recently cut interest rates, claiming confidence in lower inflation, but that confidence seems to have faded. The Fed is now uncertain about its inflation goals.
  2. Inflation remains high, especially for everyday necessities like food and housing, causing consumers to struggle with rising costs. Recent data shows that inflation is not improving as expected.
  3. Instead of lowering interest rates, which may not help ordinary people, the Fed should step back and allow the market to adjust naturally. This could help stabilize the economy and provide better opportunities for regular investors.

Notes on the Macro-Finance Sitch for 2025-01-13 Mo

Brad DeLong's Grasping Reality • 184 implied HN points • 13 Jan 25
💰 Finance Monetary Policy Labor Market Interest Rates
  1. The U.S. labor market is still strong, showing no signs of cooling off. Recently, 256,000 new jobs were added, which is much more than expected.
  2. Inflation in the U.S. hasn't exceeded the Federal Reserve's target since mid-2022, but there's concern it could rise again. The Fed needs to make sure its policies stay neutral to keep inflation in check.
  3. There are worries that the current financial market is overly optimistic. If the expectations for market growth don't pan out, it could lead to a serious economic downturn.

Not in a Hurry

The Transcript • 79 implied HN points • 07 Oct 24
💰 Finance Economics Investments Banking Market Trends Interest Rates
  1. The Federal Reserve is not rushing to cut interest rates anytime soon. They want to see more economic data before making any decisions.
  2. Many experts believe that the market may be expecting interest rate cuts too soon and that any drops in rates won't happen as fast as people think.
  3. Overall, the economy shows signs of strength with stable hiring and positive corporate earnings, making it unclear if rate cuts are actually needed right now.

Three reasons the Federal Reserve is likely to cut interest rates soon

Noahpinion • 8647 implied HN points • 03 Feb 24
💰 Finance Economy Interest Rates Inflation Monetary Policy
  1. The U.S. economy is showing strong signs of a soft landing with low unemployment, surging job numbers, high employment rates, and accelerating wages.
  2. Inflation has fallen back to the 2% target, providing a remarkable macroeconomic achievement.
  3. Despite the strong economy, there is speculation that the Federal Reserve might cut interest rates soon due to reasons like accelerating productivity growth.

Slick Landing

Doomberg • 8377 implied HN points • 06 Jan 24
💰 Finance Economy Interest Rates GDP Market Analysis Macroeconomics
  1. In 2022, the US economy was expected to fall into a deep recession, but it didn't.
  2. Despite doubts, the Federal Reserve's aggressive interest rate hikes had a positive impact on the economy.
  3. Forecasts for the US economy are challenging, and unexpected outcomes provide unique learning opportunities.

The Bonds And The Stock Market

Points And Figures • 586 implied HN points • 24 Oct 24
💰 Finance Market Trends Investment Strategies Economic Policy Interest Rates Stock Analysis
  1. The stock market has experienced various crashes in the past, but today there are better systems in place to prevent a major crash like in 1987. It's still possible to see market dips, but the overall structure is stronger now.
  2. Interest rates on government bonds are rising, which could impact the stock market negatively if rates reach certain levels. Keeping an eye on these rates is important for understanding market trends.
  3. Government spending is a concern, and both political parties aren't talking about reducing it. If spending continues unchecked, it could lead to serious economic issues in the future.

Ticker Take: a weekly newsletter on investing.

Jon’s Newsletter • 119 implied HN points • 05 Aug 24
💰 Finance Stock Market Investing Economic Trends Interest Rates
  1. The stock market is experiencing a decline due to concerns about weaker growth in China and delays in new technologies from major companies like Nvidia. Investors are getting nervous, leading to a selloff.
  2. Reports of disappointing job numbers in the U.S. have made investors worried about the economy, especially with the Federal Reserve possibly cutting interest rates into a recession rather than a soft landing.
  3. Despite the current market downturn, historical data suggests that bull markets can last longer than many think. This bull market has lasted about 22 months so far, which is still shorter than average.

Lights on the runway for the soft landing

Stay-At-Home Macro (SAHM) • 1356 implied HN points • 11 Jan 24
💰 Finance Economy Inflation Labor Market Consumer spending Interest Rates
  1. The labor market is strong, American consumers are spending well, and most families are financially better off.
  2. Inflation is heading towards 2%, with businesses adjusting prices and the Fed needing to act accordingly.
  3. Forecasts suggest a recession may be avoided, softening the pessimistic rhetoric and improving consumer sentiment.

The "worst possible outcome" for the Fed is an unnecessary recession, not reversing a cut

Stay-At-Home Macro (SAHM) • 1238 implied HN points • 24 Jan 24
💰 Finance Monetary Policy Inflation Interest Rates Unemployment Economy
  1. The Fed's main concern is avoiding an unnecessary recession, not reversing a rate cut.
  2. Inflation has decreased, but the Fed is hesitant to cut rates due to fears of inflation resurgence.
  3. The Fed should balance its mandate of stable prices and maximum employment to avoid causing an unnecessary recession.

The Houthis, A Disappointing Wage Report, and the Tumbling Yen

Japan Economy Watch • 1098 implied HN points • 17 Jan 24
💰 Finance Markets Interest Rates Inflation Economy Wages
  1. The yen has weakened due to external factors like the Houthi attack, impacting Japanese economy and inflation, and market anticipation of interest rate changes. The disappointing wage report for November dampened expectations for a rise in interest rates by the Bank of Japan, leading to a weaker yen.
  2. An accurate model for predicting the yen's strength has a standard error of about 3.4 yen. A sizeable discrepancy between the model's forecast and the actual yen value could either indicate a correction back to expected levels or suggest a long-term trend change.
  3. The growth in nominal wages in Japan has consistently fallen short of the 3% goal needed for sustained inflation. This has influenced market expectations regarding the Bank of Japan's monetary policy decisions and consequently impacted the yen's valuation.

Media Notes

The Lens • 982 implied HN points • 22 Jan 24
💰 Finance Economics Monetary Policy Inflation Interest Rates Debt
  1. Stephanie Kelton discusses alternative ways to handle inflationary pressures globally
  2. Central banks turning to rate hikes may not be the most effective solution for managing inflation
  3. Raising interest rates can have unintended consequences and may not always lead to desired outcomes

Interest Rate Risks are Collapsing Banks

The Informationist • 1650 implied HN points • 30 Apr 23
💰 Finance Banking Interest Rates Risk management Financial Crisis Investments
  1. Interest rate risks can lead to bank collapses due to mismanagement and lack of oversight
  2. Different types of interest rate risks affect banks' financial positions, such as repricing risk and basis risk
  3. It is important for individuals to be cautious with their bank deposits and consider diversifying investments based on personal risk tolerance and long-term goals

A Sugar AI High Shrugs Off Bad Market News

Peter Navarro's Taking Back Trump's America • 884 implied HN points • 12 Jan 24
💰 Finance Markets Investments Economy Interest Rates Geopolitics
  1. The S&P 500 continues to rise despite bad news like inflation and unemployment.
  2. Big tech billionaires are heavily investing in AI that may impact the job market and lead to technological warfare.
  3. Geopolitical tensions, including the possibility of war in the Middle East, are influencing the market's stability.

Economics Links

In My Tribe • 394 implied HN points • 24 Dec 24
💰 Finance Macroeconomics Interest Rates Consumption Inflation Government Policy Economic Theory
  1. Cato's wish list includes ideas for government reform, like raising Social Security retirement ages. Some of these suggestions might not be politically popular, but they show a push for change from a libertarian angle.
  2. There's a big difference in how academics and policymakers view the impact of interest rates on consumption. Academics think higher rates could boost future consumption, while policymakers see them as a negative for the economy.
  3. Scott Sumner highlights the issues with measuring inflation. He argues that inflation numbers are often confusing and imprecise, which also affects how we understand productivity changes.

Michael Hudson: Why the US banking system is breaking up

Geopolitical Economy Report • 1275 implied HN points • 12 Mar 23
💰 Finance Banking Federal Reserve Interest Rates Financial Crisis Cryptocurrency
  1. The US banking system is facing a significant crisis due to the consequences of past actions, like the 2009 bank bailout and the quantitative easing measures that followed.
  2. Rising interest rates are causing bond prices to fall, which is putting pressure on banks as their assets decrease in value against deposit liabilities.
  3. The current banking crisis is reminiscent of past financial failures, like the savings and loan crisis in the 1980s, and is exacerbated by factors like the cryptocurrency wave and derivatives trading.

Data Update 3 for 2024: A Rule-breaking Year for Interest Rates

Musings on Markets • 599 implied HN points • 25 Jan 24
💰 Finance Interest Rates Bond Markets Corporate Finance Economic Indicators
  1. Interest rates in 2023 showed little change, challenging the idea that the Fed is solely responsible for their movements. It's more about market dynamics and inflation.
  2. An inverted yield curve has traditionally been seen as a warning sign for recessions, but recent events in 2023 suggest it isn't always accurate. The economy remained stable despite the inversion.
  3. Looking forward, inflation will play a key role in determining interest rates in 2024. If inflation continues to drop, long-term rates might go down too.

The Bank of Japan July Surprise

The Informationist • 1100 implied HN points • 30 Jul 23
💰 Finance Market Dynamics Central Banks Bond Market Interest Rates Investments
  1. The Bank of Japan recently made an announcement that caused the USD and Japanese bond yields to shift.
  2. The implications of the Bank of Japan's actions have affected US Treasuries and could lead to the US Treasury issuing more debt.
  3. Investors are advised to strategically manage portfolios due to potential market shifts and economic uncertainties.

Money Supply Growth Accelerates And Hits A 27-Month High

QTR’s Fringe Finance • 24 implied HN points • 16 Jan 25
💰 Finance Economic Policy Interest Rates Government spending Inflation
  1. The money supply in the economy is growing rapidly, reaching a high not seen in over two years. This growth is mainly driven by government spending rather than strong economic conditions.
  2. Interest rates are being pushed down by the Federal Reserve to help manage the government's large debt. This could lead to future inflation as more money is created to handle increasing deficits.
  3. Despite recent economic growth, many believe it isn't based on solid foundations. The reliance on government spending and credit could pose risks for the economy moving forward.

GDP: Six Years of Zero Growth

Japan Economy Watch • 199 implied HN points • 16 May 24
💰 Finance Economy Government spending Interest Rates
  1. Japanese GDP has experienced zero growth in the past six years, with household consumption and business investment showing no positive change.
  2. Government spending hikes have prevented a worse decline in GDP, increasing by 8% from 2018.
  3. Despite a significant depreciation of the yen, exports have only increased by 4% over six years, indicating modest growth.

The Monetary Event Horizon

The Dollar Endgame • 938 implied HN points • 08 Jul 23
💰 Finance Debt Economy Government Interest Rates
  1. The U.S. national debt is skyrocketing due to increased government spending, tax cuts, and economic events like the COVID-19 pandemic, leading to a staggering $32.47 trillion in debt and a rapid increase of over $1 trillion in just 34 days.
  2. As the U.S. debt continues to grow, the country is possibly entering a debt spiral where borrowing becomes necessary to fulfill existing financial obligations, potentially leading to an annual interest payment of $1.6 trillion at a 5% rate and putting the nation at risk of financial instability.
  3. Rising interest rates and debt levels could push the U.S. Treasury towards insolvency, with potential consequences including inflation and the need for severe fiscal austerity measures to mitigate the crisis, a situation further complicated by complex economic feedback loops.

The U.S. Economy is Roaring. Why Should Rates Come Down?

The Overshoot • 452 implied HN points • 27 Jan 24
💰 Finance Economy Interest Rates Growth Inflation Forecasting
  1. The U.S. Economy is showing strong growth and may not need rate cuts despite controlled inflation.
  2. Traders anticipate interest rates to decrease, but data suggests a period of faster growth akin to past economic booms.
  3. Initial forecasts of a U.S. recession were proven wrong, with the economy growing over 3% and showing resilience against negative predictions.

Changing Winds

Market Sentiment • 805 implied HN points • 12 Feb 23
💰 Finance Investing Economic Forecasting Interest Rates Stock Market
  1. Top-down investing looks at big-picture factors like interest rates and GDP, while bottom-up focuses on individual company fundamentals.
  2. Combining both top-down and bottom-up approaches can lead to better investment decisions, as seen from experiences like the 2008 crash and LTCM failure.
  3. In a changing market with high inflation and rising interest rates, the best strategy is to balance top-down understanding with bottom-up analysis for successful investing.

The BoJ is Trapped

The Dollar Endgame • 279 implied HN points • 19 Mar 24
💰 Finance Monetary Policy Central Bank Inflation Interest Rates
  1. The Bank of Japan raised its rates for the first time in years, adjusting its primary goal for short-term interest rates and marking its first rate hike since 2007.
  2. The Bank of Japan previously used Negative Interest Rate Policy to stimulate borrowing and lending to revitalize Japan's sluggish economy.
  3. The Bank of Japan has ceased certain policies but will continue to print money, maintain low rates, and combat potential inflation, as seen through their recent monetary announcements.

BOJ Finally Pulls the Trigger on Rate Policy, But It’s a Low-Caliber Gun

Japan Economy Watch • 259 implied HN points • 20 Mar 24
💰 Finance Monetary Policy Interest Rates Inflation Economic Forecast Currency Exchange
  1. BOJ's interest rate policy tweak is more about changing the mechanism to keep rates low, gradually raising overnight rates from negative to low positive percentages over time.
  2. Ending Yield Curve Control means BOJ stops directly controlling long-term rates but still aims to keep them low by continuing to buy the same amount of long-term bonds.
  3. BOJ remains focused on low inflation and plans to raise interest rates if it rises too high, but for now, it sees current inflation as temporary due to global factors.

Michael Hudson: Why the US bank crisis is not over

Geopolitical Economy Report • 717 implied HN points • 14 Mar 23
💰 Finance Banking Interest Rates
  1. When interest rates rise, bond prices fall, and banks can hold onto securities without marking down their assets, showing the decline only during a run on the bank.
  2. Depositors withdrew money as banks acted greedily, paying low deposit rates while making high profits, causing a shift towards more fair market returns elsewhere.
  3. The US bank crisis involves a mix of deregulatory corruption, political influence, and economic imbalance in the face of financial claims surpassing economic ability to pay.

BOJ Stands Pat; Yen Weakens to ¥158; Inflation Substantially Below 2% Goal

Japan Economy Watch • 159 implied HN points • 27 Apr 24
💰 Finance Inflation Central Bank Interest Rates Currency Exchange Economic outlook
  1. Bank of Japan (BOJ) announced no new tightening measures, leading to yen weakening to ¥158/$
  2. Inflation in Japan has fallen substantially below the 2% goal, with core inflation hitting 1.4% in the past six months
  3. BOJ remains optimistic about reaching stable 2% inflation, emphasizing on a 'virtuous cycle' between wages and prices

Would Yen Intervention Succeed?

Japan Economy Watch • 179 implied HN points • 15 Apr 24
💰 Finance Intervention Interest Rates
  1. The effectiveness of yen intervention by the Ministry of Finance is uncertain, based on past attempts and the influence of interest rate gaps.
  2. The weakened yen might not necessarily be due to unwarranted speculation, but rather a reflection of long-term weakening of the Japanese economy.
  3. The Bank of Japan's actions, like increasing interest rates, could have a more significant impact on the yen's value than direct interventions by the Ministry of Finance.