The hottest Interest Rates Substack posts right now

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The Math of the Housing Crunch

The Sunday Morning Post • 58 implied HN points • 11 Feb 24
💰 Finance Housing Market Interest Rates Construction Economy
  1. The housing crisis has worsened in recent years due to factors like increased rents and higher home prices, impacting policymakers and individuals alike.
  2. The root of the housing crunch dates back to the Great Recession in 2007, leading to a significant drop in new home construction that never fully recovered.
  3. To ease the housing crunch, there is a need for an increase in the construction of various types of housing units, which has already shown some promise in the rental market.

Disinflation vs Deflation Explained

Concepts of Finance 🧠 • 159 implied HN points • 01 Aug 23
💰 Finance Economic Policy Inflation Deflation Interest Rates Investment Strategies
  1. Disinflation means prices are still going up, but not as fast as before. It's a slowdown in inflation, which can be seen as a good sign for the economy.
  2. Deflation is when prices actually fall, which can seem good for prices but often leads to negative effects like less spending and economic slowdown.
  3. A balanced approach is crucial. Some inflation is often healthy for the economy because it encourages people to spend and invest, avoiding the risks linked to both disinflation and deflation.

Portfolio Update and Performance Review

Modern Value Investing • 117 implied HN points • 01 Aug 23
💰 Finance Investing Portfolio Performance Interest Rates Market Analysis
  1. Portfolio is up 150% YTD, driven by investments in Meta Platforms and highly shorted stocks like Upstart and Opendoor.
  2. Author is getting more cautious due to rising inflation and interest rates, and has diversified investments.
  3. Author has built a 7% position in long-term treasuries as a partial hedge against market turmoil.

88mph: Fixed Interest Rate Protocol

DeFi Education • 659 implied HN points • 06 Feb 22
🔮 Crypto DeFi Protocols Interest Rates Blockchain Finance
  1. 88mph helps users get fixed interest rates instead of variable ones. This can make managing money easier and less risky.
  2. The platform connects users with popular DeFi protocols like Compound and Aave. That means users can benefit from both fixed rates and other yield options.
  3. The 88mph team is considered strong and reliable. This adds trust to the platform for users looking to invest.
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Why the market has really rallied following the Fed decision?

Global Markets Investor • 79 implied HN points • 14 Dec 23
💰 Finance Markets Federal Reserve Interest Rates Economic projections Inflation
  1. The market rallied significantly after the Federal Reserve made unexpected decisions, like not pushing back against expected interest rate cuts and adjusting interest rate forecasts significantly.
  2. Investors were surprised by the Fed's dovish shift towards easing and the embrace of soft landing strategies, which resulted in market excitement and continued rallies in stocks and bonds.
  3. While the market is currently optimistic due to the Fed's stance, there are warnings about potential overbought conditions and the need to watch out for sharp corrections.

Inflation: Japan Stands Alone, Part II

Japan Economy Watch • 299 implied HN points • 08 Sep 22
💰 Finance Economy Inflation Interest Rates Currency Government Policy
  1. Bank of Japan faces a dilemma with interest rates and the yen due to the growing gap between Japan and other countries' interest rates.
  2. Japan's weak domestic demand and a very weak yen are impacting consumer spending and business investment negatively.
  3. There is uncertainty around whether speculators will force the Bank of Japan to raise 10-year bond rates above 0.25% in response to the weak yen.

Audio Debate On Japan’s Inflation, Interest Rates, and Low Growth

Japan Economy Watch • 239 implied HN points • 07 Nov 22
💰 Finance Economy Interest Rates Inflation Monetary Policy
  1. Central banks no longer target money supply because the relationship between money growth and inflation became unstable due to changes in financial markets.
  2. In Japan, weak demand for goods and services, not poor monetary policy, has kept interest rates near zero for over a quarter century.
  3. Low aggregate demand in Japan is driven by falling household incomes, lack of competitiveness, and companies hesitating to expand due to weak capacity utilization.

The Forgotten Case Against Milton Friedman

Informer • 98 implied HN points • 14 May 23
🇺🇸 U.S. Politics Economics Policy Inflation Progressives Interest Rates
  1. Milton Friedman's ideas changed economics by challenging the Phillips curve trade-off between inflation and unemployment.
  2. James Tobin provided an alternative theory of inflation focusing on demand shifts between sectors.
  3. Progressives didn't fully embrace Tobin's theory, leading to disagreements on tackling inflation and interest rates.

Too High for Too Long?

Modern Value Investing • 98 implied HN points • 06 Aug 23
💰 Finance Stock Market Interest Rates Real Estate Economic outlook
  1. Inflation measures are flawed, leading to skepticism about high interest rates, causing uncertainty for the US economy.
  2. The current rate hike cycle is more aggressive than previous cycles, potentially risking a recession in 2024.
  3. Challenges in real estate, student loan debts, and credit card debts, along with aggressive hiring, may indicate shaky ground for the US economy.

The FED has left the US Banking System Destabilized after Unprecedented Interest Rate Cycle

Modern Value Investing • 98 implied HN points • 12 Mar 23
💰 Finance Banking Interest Rates Economy Federal Reserve Monetary Policy
  1. US banks are facing increased risks of deposit outflows due to systemic vulnerabilities in the banking system.
  2. Unattractive interest rates on deposits compared to treasuries have left US banks trapped without sacrificing profitability.
  3. The FED must act quickly by reducing interest rates to stabilize the banking system and prevent further harm to the economy.

Is Yen’s Decline Over?

Japan Economy Watch • 299 implied HN points • 29 Jul 22
💰 Finance Currency Exchange Interest Rates Inflation Central Bank Market Trends
  1. Traders in currency and bond markets lost big on bets about the weakening yen and rising US interest rates, impacting the yen's value.
  2. The US Federal Reserve's quick actions against inflation caused a change in interest rate outlook, leading to a significant drop in US treasury bond rates.
  3. Market sentiment shifted due to the revised expectations of lower interest rates set by the US Federal Reserve, impacting traders' future predictions.

Is the US economy heading for a soft landing? Part 1/2

Global Markets Investor • 59 implied HN points • 17 Dec 23
💰 Finance Economic Forecasting Banking Sector Consumer spending Interest Rates
  1. Soft landing in the US economy refers to a scenario where interest rates increase without causing a recession. Achieving a soft landing is challenging due to the unpredictable effects of rising rates.
  2. Current economic indicators suggest a potential slowdown, with data like US bank lending growth declining and bankruptcy filings increasing. These factors could lead to significant economic problems if extended.
  3. Consumer spending in the US may face limitations, as issues like high credit card debt and rising delinquencies pose risks. The Federal Reserve's actions regarding interest rates could impact future economic outcomes.

The Credit Card Debt Bomb is Ticking

The Sunday Morning Post • 78 implied HN points • 17 Sep 23
💰 Finance Economy Interest Rates
  1. Total credit card debt in the US surpassed $1 trillion for the first time in history, with high interest rates reaching an average of 20.68% in May 2023.
  2. Credit card delinquencies hit an 11-year high in the second quarter of 2023, with 2.77% of all credit card payments being missed.
  3. Delinquency rates for home mortgages and commercial loans are remarkably low, contrasting sharply with the concerning trend of rising credit card debt and delinquencies.

Yen At ¥128.6

Japan Economy Watch • 279 implied HN points • 19 Apr 22
💰 Finance Currency Markets Interest Rates Economic Impact
  1. The yen has weakened to ¥128.6 from earlier lows, fluctuating as markets don't move in straight lines.
  2. MOF interventions in currency markets may not have a lasting effect if the yen's decline reflects fundamentals.
  3. The interest rate gap between the US and Japan is a major factor driving the yen's decline, with investors shifting money to the US due to higher rates.

O Bubble, Where Art Thou?

The Last Bear Standing • 55 implied HN points • 08 Mar 24
💰 Finance Stock Market Cryptocurrency Market Analysis Interest Rates
  1. The equity market has shown signs of over-indulgence recently, with increasing enthusiasm and unbridled momentum.
  2. Market worry has shifted from lack of enthusiasm to lack of disbelief, raising concerns about the sustainability of the current bull run.
  3. The macroeconomic resilience is attributed to a balance between big fiscal policies, monetary tightening, and strong balance sheets post-pandemic.

Note on Monetary Policy and Jackson Hole

Erdmann Housing Tracker • 126 implied HN points • 25 Aug 23
💰 Finance Monetary Policy Inflation Interest Rates Housing Market Economic Analysis
  1. Powell's approach to monetary policy is based on conventional models, which may not fully address current economic issues.
  2. There is a concern that inflation is settling above the 2% target due to trends in goods and services.
  3. Housing supply issues contribute to 'inflation' and can be misleading when analyzing monetary policy impacts.

¥/$ May Be Heading to ¥125

Japan Economy Watch • 239 implied HN points • 24 Mar 22
💰 Finance Currency Economy Trade Interest Rates Inflation
  1. The yen may be heading towards ¥125, which would be its weakest level in 20 years, mainly due to factors like interest rate gaps between US and Japan.
  2. The ongoing Russia-Ukraine conflict and supply chain disruptions are contributing to yen weakening, despite historical perceptions of yen as a safe-haven currency during crises.
  3. Japan's shift from trade surpluses to deficits impacts its currency, and a weak yen may no longer be seen as entirely beneficial, especially if oil prices keep rising.

No, I don't think the Fed drives future yields

Erdmann Housing Tracker • 105 implied HN points • 05 Oct 23
💰 Finance Monetary Policy Interest Rates Quantitative Easing Market Trends
  1. Forward interest rates are mainly driven by changing economic productivity and sentiment, with the Fed playing a secondary role.
  2. Market sentiment about real future economic activity has a significant impact on interest rates.
  3. Most of the changes in long-term bond yields since 1989 have occurred during Federal Open Market Committee meetings.

Lending Protocol Taxonomy, part 2: Interest Rates

David’s Substack • 39 implied HN points • 16 Nov 23
💰 Finance Interest Rates Pricing Auctions
  1. Interest rates in lending protocols are usually quoted as annualized percentage rate (APR) or yield (APY).
  2. Different pricing mechanisms in lending protocols include orderbook pricing, utilization-based pricing, auctions, and manual/governance-led pricing.
  3. Protocols like Ajna and Tazz introduce innovative ways to set interest rates without relying on oracles, enabling unique functionalities.

March 2024 Fed Meeting Preview

Erdmann Housing Tracker • 42 implied HN points • 19 Mar 24
💰 Finance Monetary Policy Interest Rates Economic Growth Inflation Housing Market
  1. Consider using NGDP growth to communicate monetary policy instead of targeting inflation with short term interest rates.
  2. The yield curve's dynamics indicate recessionary signals and potential rate cuts by the Fed.
  3. Economic growth predictions for 2024 suggest low inflation, steady GDP growth, and a possible decrease in target rates by the Fed.

Forward Guidance

The Last Bear Standing • 133 implied HN points • 03 Mar 23
💰 Finance Monetary Policy Central Banks Inflation Interest Rates
  1. The Dot Plot is the Fed's way of showing where they think interest rates will go in the future.
  2. Yield Curve Control is when central banks adjust short-term and long-term rates to tackle inflation and maintain financial stability.
  3. The Fed's Dilemma involves trying to raise rates to tackle inflation while avoiding destabilizing long-duration assets and maintaining financial stability.

Path-Breaking Research Explains the Low U.S. Consumer Gallup Poll Readings

The People's Economist with Anthony Chan • 19 implied HN points • 09 Feb 24
🇺🇸 U.S. Politics Economy Inflation Interest Rates
  1. Consumers in the U.S. are feeling pessimistic despite strong economic indicators like GDP growth, low unemployment rates, and declining Misery Index, mainly due to concerns about inflation viewed as a severe economic hardship.
  2. Recent data suggests that Americans usually lag in incorporating the effects of inflation, with sentiment influenced by inflation readings observed 6 to 12 months prior, leading to a risk-averse approach among consumers.
  3. Consumer dissatisfaction might also stem from the rising prices of dining out compared to cooking at home, affecting restaurant spending and consumer sentiment.

It's Getting Harder to Get a Loan

The Sunday Morning Post • 39 implied HN points • 25 Jun 23
💰 Finance Loans Interest Rates Economy Banking
  1. Banks are making it harder to get a loan due to higher interest rates and tightened lending standards across all loan categories.
  2. Rising deposit costs are influencing banks to be more selective in lending, preferring customers with deposits in their institution.
  3. Banks are tightening lending standards to protect themselves, leading to fewer loans offered and increased charges, covenants, collateral requirements, and reduced loan sizes.

More on the Fed and Long-Term Interest Rates

Erdmann Housing Tracker • 63 implied HN points • 17 Oct 23
💰 Finance Interest Rates Federal Reserve Market Analysis
  1. The Fed's impact on interest rates may not be as significant as perceived, with most rate changes occurring outside of Fed meetings.
  2. Changes in long-term interest rates are likely not correlated with new information from Fed meetings.
  3. Interest rate changes during Fed meetings appear independent of changes outside of meetings, indicating that market expectations are already adjusted before meetings.