The hottest Monetary Policy Substack posts right now

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The US national debt reached $34.5 trillion, an all-time record, but does it actually matter?

Global Markets Investor • 39 implied HN points • 07 Mar 24
💰 Finance Debt Economy Investments Taxes Monetary Policy
  1. The US national debt has reached a record $34.5 trillion, increasing by $1 trillion every 100 days since June. This high level of debt poses challenges for the government and future generations.
  2. The US debt-to-GDP ratio is currently at 123.7%, near the all-time high. A high ratio decreases a country's ability to pay back debts and could lead to default or inflation-adjusted losses for investors.
  3. A country with a debt-to-GDP ratio above 130% historically has a high probability of default. High debt levels can limit future investments, impact economic growth, and reduce flexibility in responding to crises.

January 2024 CPI Update

Erdmann Housing Tracker • 63 implied HN points • 14 Feb 24
💰 Finance Economic Analysis Monetary Policy Inflation Federal Reserve
  1. Reaction to monthly CPI updates often fails to consider the lag affecting the shelter component, leading to surprises in news interpretation.
  2. Market expectations of a Fed rate cut were influenced by the latest report, shifting them further in the future.
  3. Monetary measures like currency in circulation and M2 trended down post-Covid scare, while the Fed's balance sheet shrinks without obvious disruption.

What is Yi Gang trying to say in his 1st interview after retiring from PBoC?

Pekingnology • 71 implied HN points • 06 Feb 24
🌍 World Politics Economics Monetary Policy Currency Financial history Central Banking
  1. Yi Gang discussed the historical significance of Jiaozi, the first paper money, and its implications for currency policies
  2. He emphasized the importance of competition under constraints for a successful monetary system
  3. Yi Gang highlighted the necessity of establishing and enhancing modern central bank systems to maintain currency stability

The Fed's Global Dilemma

Concoda • 794 implied HN points • 01 May 23
💰 Finance Monetary Policy Global Finance Financial Stability Central Banking
  1. The banking system has evolved significantly post the 2007/08 Great Financial Crisis, leading to changes in global monetary standards and U.S. central bank's mechanisms.
  2. Regulatory standards like LCR, NSFR, and SLR have transformed major financial institutions into stable entities, impacting their ability to engage in certain financial activities.
  3. The Federal Reserve introduced new mechanisms like Jaws of the Fed™ to control money market rates and ensure financial stability, but faces a dilemma with vulnerabilities in its global lower jaws.

Fed Pivots to More Hikes, More Pain

cryptoeconomy • 648 implied HN points • 10 Jun 23
💰 Finance Economic Policy Monetary Policy Inflation Banking Investing
  1. The Federal Reserve is planning more interest rate hikes and tightening measures, signaling potential economic pain.
  2. Despite initial expectations of a pause in rate hikes due to economic impacts not yet fully realized, Fed Governor Waller is advocating for further hikes to curb inflation.
  3. Quantitative Tightening, the reversal of money printing, may be the next step for the Fed despite past failures, raising concerns of potential economic disruptions and widespread impacts.

Beyond Growth: A Strategy for Tackling Power. My speech to the EU Conference

System Change • 668 implied HN points • 29 May 23
🌍 World Politics Climate change Monetary Policy Authoritarianism
  1. The Money Interest holds real power over the planet and must be challenged by focusing on monetary policy.
  2. The economic model discussed highlights the need to shift focus from attacking the 99% for consumption to holding the 1% accountable for overproduction.
  3. To mobilize the majority for change, we must shine a light on the finance sector, educate ourselves on monetary policy, and focus on challenging the 1% instead of the 99%.

The NY Fed Trading Desk's Time to Shine?

The Overshoot • 373 implied HN points • 01 Sep 23
💰 Finance Central Banks Market conditions Government debt Monetary Policy
  1. Central banks should consider being more active in making markets for government debt directly.
  2. During the Covid crisis, bond dealers did not step in to stabilize markets, prompting central banks to intervene.
  3. Constraints on dealers may have led to market instability, prompting discussion on potentially revising regulatory choices.

The Treasury's Gambit

Concoda • 653 implied HN points • 27 May 23
💰 Finance Monetary Policy Financial Markets Central Banking
  1. Monetary leaders are implementing new tools to prevent instability in the bond market and stimulate risk assets without central bank assistance.
  2. Regulatory constraints have hindered major liquidity providers in the Treasury market, leading to the need for Treasury buyback programs to enhance liquidity.
  3. The U.S. Treasury is set to conduct buyback programs in 2024 to manage cash, boost liquidity, and potentially lower expenses and yields in the secondary Treasury market.

Corporate profits were biggest driver of inflation in Europe, IMF admits

Geopolitical Economy Report • 538 implied HN points • 27 Jun 23
💰 Finance Inflation Central Banks Monetary Policy
  1. Corporate profits have been a major driver of inflation in Europe since 2021, with companies increasing prices more than the rising costs of imported energy.
  2. The IMF suggests that companies may need to reduce profit margins to help keep inflation in line with targets set by the European Central Bank.
  3. The study challenges the traditional view that inflation is solely caused by demand-pull factors, highlighting how excessive profit increases by corporations can also drive inflation.

The Fed left rates steady as expected at 5.50%, stocks and gold at all-time highs

Global Markets Investor • 19 implied HN points • 21 Mar 24
💰 Finance Monetary Policy
  1. The Federal Reserve kept interest rates steady at 5.50% and foresees 3 cuts in 2024. First cut likely in June despite some inflation increase.
  2. The Fed plans to slow down the balance sheet reduction pace in the upcoming year, affecting market movements positively.
  3. Market reaction to the Fed's decisions saw all-time highs for stocks and gold, with bonds and cryptocurrencies rallying, and a drop in US dollar and VIX index volatility.

The Sword of Damocles

The Dollar Endgame • 319 implied HN points • 30 Aug 23
💰 Finance Global Markets Economic Theory Central Banks Monetary Policy
  1. The global financial system heavily depends on the US dollar, causing a constant demand for dollars worldwide.
  2. Triffin's Dilemma and the Dollar Milkshake Theory highlight the systemic risks and implications of the US dollar's dominance.
  3. The Fed plays a critical role in stabilizing the global financial system by supplying dollars; any missteps could lead to widespread financial instability.

The Fed's Plumbing Dilemma

Concoda • 443 implied HN points • 05 Jul 23
💰 Finance Monetary Policy Government spending Investing Market Dynamics Economy
  1. The Federal Reserve faces challenges as excess liquidity re-enters the banking system.
  2. Investors are pulling money from money market funds to seek higher yields, potentially leading to a speculative spree.
  3. Money market funds are moving liquidity from the Fed's RRP facility to the U.S. government's bank account, impacting the monetary system.

O governo surfa na competência do Banco Central que apedreja

O Observador de Corcyra • 432 implied HN points • 03 Jul 23
💼 Business Economics Government Finance Monetary Policy Central Bank
  1. The global economy in 2023 is influenced by fiscal and monetary actions taken during the pandemic, leading to low unemployment rates and strong consumer spending.
  2. Adjustments in monetary policies by central banks since 2021 have helped moderate inflation, especially in goods, and sustain economic activity without indicating a global recession in 2023.
  3. The independence of the Central Bank has allowed for the implementation of correct monetary policies, contributing to the consistent economic performance of Brazil and the potential for future organized monetary relaxation.

The Fed's Hidden Put

Concoda • 437 implied HN points • 18 Jun 23
💰 Finance Markets Liquidity Funding Monetary Policy Banking
  1. The repo market plays a crucial role in providing liquidity to the financial system globally.
  2. The repo market structure involves lenders like money market funds connecting with borrowers like hedge funds through various intermediaries.
  3. Recent changes in the repo market dynamics may lead to the Fed utilizing it as a tool for market stimulation.

The Bank of England's Jonathan Haskel on Inflation, Productivity, Brexit, and More

The Overshoot • 511 implied HN points • 13 Feb 23
💰 Finance Inflation Productivity Brexit Monetary Policy Economic Impact
  1. The Bank of England is grappling with the challenges of high inflation, low GDP, and rising unemployment due to tight labor and energy markets.
  2. There is significant uncertainty in economic forecasts, leading to a cautious approach in monetary policy decisions.
  3. Brexit has had a major impact on the UK's productivity growth and economic performance, with factors like weak business investment and health-related inactivity contributing to the situation.

Endgame #3

The Dollar Endgame • 119 implied HN points • 29 Nov 23
💰 Finance Economy Investments Monetary Policy Real Estate Banking
  1. Japan adjusted its bond yield control policy in an effort to curb interest rates, showing the delicate balance between stimulating the economy and managing debt.
  2. The United States is experiencing increases in national debt and a housing market slowdown due to rising interest rates impacting new home and car sales.
  3. Gold prices have been rising as a safe haven investment, influenced by a weakening dollar and central banks acquiring significant amounts of gold, serving as a potential indicator of future monetary debasement.

The Battle for the Treasury Market

Concoda • 502 implied HN points • 21 Mar 23
💰 Finance Market Regulation Monetary Policy Market structure Financial Stability Transparency
  1. There is a hidden battle within America's sovereign debt market that is about to transform.
  2. The regulatory focus is shifting towards increasing transparency in the Treasury market to subdue systemic risk.
  3. Implementing all-to-all trading in the Treasury market could democratize the market, enhance liquidity, and improve market resilience.

A política monetária nos EUA se encontra em território restritivo?

O Observador de Corcyra • 412 implied HN points • 26 Feb 23
💰 Finance Monetary Policy Inflation Interest Rates Economic Analysis Macroeconomics
  1. The US monetary policy has been restrictive with significant impact on the economy and financial conditions.
  2. There are debates on whether the current monetary policy pace is appropriate or if adjustments should be made.
  3. Models and projections show the complexity of predicting inflation and the impact on future monetary policy decisions.

The Japanese Maginot Line

The Dollar Endgame • 239 implied HN points • 13 Aug 23
💰 Finance Monetary Policy Central Bank Interest Rates Government debt Quantitative Easing
  1. The Bank of Japan's shift in monetary policy caused chaos in FX and stock markets. The volatility in bond markets led to unscheduled bond-buying operations.
  2. Yield Curve Control aims to keep bond yields in a tight range to suppress yields and maintain accommodative monetary policy. This strategy becomes crucial in Japan with high government debt.
  3. The BoJ is strategically intervening in bond rates, pushing them back down whenever they approach a certain threshold. They aim to maintain confusion and market control.

Collateral Damage

Concoda • 405 implied HN points • 18 Apr 23
💰 Finance Economics Markets Debt Monetary Policy
  1. Monetary leaders have created new risks while trying to eliminate old ones.
  2. There is a high demand for ultra-short-term Treasury paper due to an impending debt ceiling drama.
  3. Bilateral repos act as a sponge in the market, absorbing excess cash when the supply of bills is low.

The Catalyst That Could 'Standardize' Bitcoin

QTR’s Fringe Finance • 28 implied HN points • 12 Feb 24
💰 Finance Bitcoin Cryptocurrency Financial Crisis Monetary Policy Inflation
  1. Bitcoin adoption could be accelerated through a major financial crisis where people seek an exit ramp from the traditional financial system.
  2. The decentralized nature of Bitcoin allows for success to be tied to its growth, empowering individuals who are tired of traditional financial institutions.
  3. Bitcoin offers a chance for the public to break the cycle of bearing the cost of financial failures by opting out of the current system and embracing digital freedom.