The hottest Monetary Policy Substack posts right now

And their main takeaways
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Top Finance Topics

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.

PROJECT SYNDICATE: What Is the Fed Thinking?

Brad DeLong's Grasping Reality • 161 implied HN points • 06 Feb 24
💰 Finance Monetary Policy Interest Rates Inflation Economy
  1. The US Federal Reserve is hesitant to adjust its policy interest rate despite the economy being in balance.
  2. The Fed remains cautious about aligning rates with the neutral rate due to uncertainties in the economic outlook and inflation risks.
  3. The announcement of maintaining the federal funds rate range at 5.25-5.5% raised concerns given the already balanced US macroeconomy.
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The Global Debt Bomb

Diane Francis • 459 implied HN points • 19 Sep 22
💰 Finance Economic Crisis Sovereign debt Monetary Policy
  1. Countries like Sri Lanka are facing serious debt problems, leading to protests and government instability. This could be a warning for other nations with similar financial issues.
  2. Many countries, especially poorer ones, are struggling with rising debt due to high borrowing and the effects of global events like the war in Ukraine. This situation is getting worse and could lead to more defaults.
  3. China's lending practices are a major factor in the growing debt crisis. Their loans often come with tough terms that many countries can't manage, causing additional economic troubles.

Proceeding Recklessly

Ironsides Macroeconomics 'It's Never Different This Time' • 137 implied HN points • 23 Sep 23
💰 Finance Monetary Policy Housing Affordability Banking System
  1. The Fed's forward guidance has significant implications for market outlook, creating uncertainty for the rest of the year.
  2. There are concerns about a bear steepening of the Treasury Curve due to increased Treasury supply and reduced buyers.
  3. Housing affordability has been negatively impacted by monetary policy, leading to structural changes in rental rates.

A Tale of Two Currencies

BowTiedMara - Geoarbitrage & Mobility Assets • 137 implied HN points • 24 Apr 23
🌍 World Politics Currency Inflation Monetary Policy Central Bank Financial Crisis
  1. Argentina has a history of economic turmoil with multiple currency crises and hyperinflations.
  2. The government deficit in Argentina has grown significantly since 2011, leading to economic challenges.
  3. Potential solutions for Argentina's economic crisis include complete dollarization, adopting a Bitcoin standard, or exploring joint currencies with other countries like China.

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.

Reading Kuroda's Mind

Japan Economy Watch • 239 implied HN points • 21 Jan 23
💰 Finance Monetary Policy Interest Rates
  1. Bank of Japan Governor Kuroda defied market expectations and successfully maintained Japan Government Bond rates below his target, causing losses for speculators.
  2. The perception of high inflation in Japan is misleading due to factors like food and energy prices and statistical illusions.
  3. To achieve sustained inflation and reach the 2% target, Japan needs significant wage hikes, as monetary policy alone has not been sufficient.

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.

Video: Weakest Real Yen In Half Century Reflects Deterioration of Japan’s Competitiveness

Japan Economy Watch • 279 implied HN points • 14 Nov 22
💰 Finance Economy Currency Competitiveness Monetary Policy Trade
  1. In the short term, Tokyo has limited options to address yen's weakness primarily due to the gap between American and Japanese interest rates.
  2. The weak yen reflects not just monetary policy differences but also a significant decline in Japan's real competitiveness over the years.
  3. To improve the situation, Japan needs to focus on reforms that enhance the country's underlying efficiency, making Japanese firms competitive in the global market once again.

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.

Iceberg Risk

Ironsides Macroeconomics 'It's Never Different This Time' • 117 implied HN points • 18 Feb 23
💰 Finance Economic outlook Market Analysis Monetary Policy Investment strategy
  1. The economic outlook for 2023 differs from the consensus, with expectations of lower inflation and resilient growth.
  2. The treasury curve suggests an improved growth outlook without an increase in inflation expectations.
  3. The earnings recession seen in certain sectors is recovering, indicating a positive trend in earnings revisions.

Is Japan’s Inflation Really At a 40-Year High?

Japan Economy Watch • 259 implied HN points • 21 Nov 22
💰 Finance Inflation Banking Economy Monetary Policy
  1. Japan's inflation trend is not accurately represented by the headline figure of a 40-year high, considering the measure used is specific and not reflective of overall inflation.
  2. Year-to-year comparisons of inflation can be misleading, especially for products with price volatility, potentially skewing the true underlying trend.
  3. The causes and implications of inflation must be carefully analyzed to determine the appropriate monetary policy response, balancing economic growth with the impact of higher interest rates.

Accidentally testing NGDP level targeting

Erdmann Housing Tracker • 126 implied HN points • 06 Feb 24
💰 Finance Monetary Policy Inflation Fiscal policy
  1. Accidentally testing market monetarism, particularly nominal GDP targeting, yielded successful results during economic shocks.
  2. Nominal GDP targeting can help stabilize the business cycle by allowing for counter-cyclical inflation and smoothing disruptions in nominal incomes.
  3. Adopting nominal GDP level targeting could lead to improved productivity and reduced reliance on interest rates in monetary policy discussions.

What Is Inflation?

Economic Forces • 6 implied HN points • 19 Dec 24
💰 Finance Inflation Price theory Monetary Policy Market Dynamics
  1. Inflation is when prices keep going up over time, not just a one-time price hike. This shows that inflation affects the overall economy and not just individual items.
  2. Measuring inflation involves looking at how much purchasing power money loses. When money loses value, prices generally rise, which means inflation is happening.
  3. It's important to consider how supply and demand for money influence inflation. Understanding this can help people assess the real causes behind rising prices and not just blame specific products.

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.

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 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.

The Stock and Flow of M2

Ironsides Macroeconomics 'It's Never Different This Time' • 98 implied HN points • 25 Feb 23
💰 Finance Economics Monetary Policy Investing Market Analysis
  1. Focus on the rate of change in the money supply to understand the flow of money and system liquidity.
  2. The stock of money may be excessive, but the growth rate is rapidly declining, affecting the outlook for monetary policy and Treasuries.
  3. The impact of monetary policy on housing demand and global manufacturing was immediate in 2022.

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.

WSJ Editorial Cites My Writings on BOJ Dilemma

Japan Economy Watch • 179 implied HN points • 18 Jan 23
💰 Finance Monetary Policy Economics Financial Markets
  1. The Bank of Japan decided to maintain its monetary policy which initially impacted the currency exchange rate and bond yields.
  2. An editorial in the Wall Street Journal referenced writings by Richard Katz concerning the BOJ policy, shedding light on the ongoing discussions.
  3. Richard Katz had a letter to the editor published in response to an op-ed about BOJ policy, showcasing differing opinions and contributing to the dialogue.

Modern Industrial Policy

Ironsides Macroeconomics 'It's Never Different This Time' • 78 implied HN points • 28 Oct 23
💰 Finance Economics Investing Monetary Policy Market Analysis
  1. The equity market faced a valuation correction, driven by different sectors and Treasury supply issues.
  2. Strong growth data and monetary policy shifts are impacting financial conditions and asset valuations.
  3. Investment outlook suggests potential for disorderly market shifts despite some attractiveness in fixed income.

Former PBOC Research Chief Attempts to Calm Stock Market Frenzy

Pekingnology • 33 implied HN points • 08 Oct 24
💰 Finance Stock Market Economic Policy Monetary Policy Market Regulation
  1. China's central bank is not directly supporting the stock market, so investors should be careful and avoid risky speculation.
  2. Recent policies by the government have improved investor confidence but real economic improvements will take time and continuous efforts.
  3. It's important for financial institutions to help investors understand risks and ensure that loans aren't misused to invest in the stock market.

Inflation - what's it all about?

Concepts of Finance 🧠 • 159 implied HN points • 10 Feb 23
💰 Finance Economics Investments Monetary Policy Financial Literacy
  1. Inflation means prices are going up, which affects how much you can buy with your money. This can make it harder to afford everyday things like food and housing.
  2. The consumer price index (CPI) is used to measure inflation by looking at the average cost of common items. Experts track how these prices change over time to understand inflation rates.
  3. Sometimes inflation can be good for the economy because it shows increased demand for goods. However, if wages don't keep up with rising prices, it can create financial strain for many people.

Investing Update: Don't Forget This Chart

Spilled Coffee • 12 implied HN points • 12 Oct 24
💰 Finance Investing Stock Market Economic Indicators Monetary Policy Market Analysis
  1. The S&P 500 has had a strong performance this year, with 45 new all-time highs and the best start since 2000. This means the market is doing really well right now.
  2. Despite the market's successes, only 54% of S&P 500 stocks are above their 20-day moving average. This is a bit low and worth keeping an eye on.
  3. With recent jobless claims rising more than expected, it could influence the Fed's decisions on interest rates. Many experts still believe there will be a rate cut soon.

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.