The hottest Monetary Policy Substack posts right now

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The “Sell America” Trade Isn’t A One-Off

QTR’s Fringe Finance • 26 implied HN points • 23 Jan 26
đź’° Finance Monetary Policy
  1. Foreign demand for U.S. Treasuries is weakening at the same time U.S. deficits are growing, driven by Japan’s rate normalization, higher European borrowing, and less Chinese dollar recycling. That mix points to a weaker dollar, higher long-term yields, and more reliance on policy support for the Treasury market.
  2. Geopolitical and trade shocks can quickly trigger a "Sell America" trade where stocks, Treasuries, and the dollar all fall together, because foreign holders can and will reprice political risk and divest U.S. assets. Even small divestments by big foreign investors signal that demand for Treasuries is a choice, not an automatic safe-haven.
  3. Because concentration risk in U.S. bonds is rising, investors should diversify into foreign stocks and bonds and consider physical gold for balance-sheet protection. The Fed's recent reserve-management purchases of T-bills show the market may be becoming increasingly dependent on central-bank support rather than organic global demand.

Bank of England holds rates, but...

Off to Lunch • 334 implied HN points • 01 Feb 24
đź’° Finance Monetary Policy
  1. The Bank of England decided to keep interest rates at 5.25%, despite a split vote among committee members.
  2. Inflation is still high in the UK at 4%, above the Bank's 2% target, but recent data suggests a slowdown in the economy.
  3. The Bank's monetary policy report hints at inflation potentially dropping to 2% in the near future, but interest rates may not be cut until sustained evidence is seen.

Trump’s Fed Chair Candidates: Sub-Mediocrity of Moral Character, at Best. & the Worst Plumb the Challenger Deep Along Several Axes

Brad DeLong's Grasping Reality • 253 implied HN points • 14 Aug 25
🇺🇸 U.S. Politics Monetary Policy
  1. The candidates for the next Federal Reserve Chair are not impressive and many lack important qualities like intelligence and moral character. This raises concerns about who will make crucial decisions.
  2. Donald Trump's past choices have been criticized as poor, especially regarding the Fed. It's suggested that he should let the Senate choose a more qualified candidate this time.
  3. The current picks are seen as politically driven rather than based on merit, which is troubling for the future of U.S. economic policy.

Fed Pivots to More Hikes, More Pain

cryptoeconomy • 648 implied HN points • 10 Jun 23
đź’° Finance Monetary Policy
  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.

2024 Predictions

The Dollar Endgame • 359 implied HN points • 13 Jan 24
đź’° Finance Monetary Policy
  1. The Federal Reserve is likely to start cutting rates by Q2 or Q3 and possibly implement quantitative easing, based on recent signals and market predictions.
  2. There is an anticipation that the Fed will eventually restart quantitative easing due to factors like high deficits and pressure from the Monetary Black Hole, impacting financial markets and assets.
  3. Inflation is expected to return in the near future as liquidity programs kick in, fiscal deficits grow, and government spending increases, potentially leading to economic challenges and a recession.
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Powell’s Confidence On Trial, Gold Rips Higher

QTR’s Fringe Finance • 31 implied HN points • 12 Jan 26
đź’° Finance Monetary Policy
  1. A criminal probe of the Fed chair risks undermining Federal Reserve independence and makes monetary policy look vulnerable to political or legal pressure.
  2. That uncertainty is negative for US risk assets and the dollar in the near term, and it can disrupt Treasury markets and capital flows.
  3. Over the long run, weakening confidence in US monetary institutions could speed global diversification away from the dollar and lift safe-haven assets like gold and silver.

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

Geopolitical Economy Report • 538 implied HN points • 27 Jun 23
đź’° Finance 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.

How to Defend Cash in under 5 Minutes

Altered States of Monetary Consciousness • 637 implied HN points • 31 Jan 25
đź’° Finance Monetary Policy
  1. Cash is important to protect against digital payment surveillance and control. Transitioning to a fully cashless society can lead to loss of personal freedom and privacy.
  2. Instead of arguing against the convenience of digital payments, it might be better to present a new perspective on why cash is valuable. Analogies can help get the message across more easily.
  3. Educating others about the risks of a cashless society takes practice. Finding quick, relatable ways to share your views can be more effective than trying to challenge established beliefs directly.

Why Did The BOJ Move Despite Conflicting Evidence on Wages and Prices?

Japan Economy Watch • 179 implied HN points • 21 Mar 24
đź’° Finance Monetary Policy
  1. The Bank of Japan's decision to make monetary policy changes despite unclear wage and price trends was questioned.
  2. There was no immediate financial market pressure on the BOJ to act, as rates were stable and not pushing past set levels.
  3. Conflicting data on wage trends created uncertainty, with various databases showing contradictory evidence, making predictions difficult.

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

The Overshoot • 511 implied HN points • 13 Feb 23
đź’° Finance Monetary Policy
  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.

Brad Setser Says Smart Things on Exorbitant Privilege Unearned & Earned

Brad DeLong's Grasping Reality • 322 implied HN points • 09 Jun 25
đź’° Finance Monetary Policy
  1. The dollar's power is not just a natural right; it relies on global faith in American institutions and returns. It's a constant balance that can shift quickly if trust is lost.
  2. Private investors have played a huge role in keeping investment flowing into the U.S., as they seek returns and perceived safety. This pattern has changed from reliance on central banks to a focus on individual investors.
  3. The stability of the dollar could be threatened by political issues within the U.S. If the legal and financial systems weaken, trust may fade and capital could flee quickly.

Money Market Update

Concoda • 183 implied HN points • 14 Aug 25
đź’° Finance Monetary Policy
  1. The RRP is now at zero, meaning that banks are using all their cash effectively without too much excess cash lying around.
  2. Money market rates are stabilizing, and there are more places to lend money again, helping to keep the market from getting too volatile.
  3. Expect at least one interest rate cut soon, as the economic growth is slow and inflation is still a concern.

No Fucking Idea: My Take On Markets Into 2026

QTR’s Fringe Finance • 50 implied HN points • 09 Dec 25
đź’° Finance Monetary Policy
  1. Markets are very uncertain for 2026: either a liquidity-fueled rally lifts prices regardless of weak fundamentals, or a slow-burn downturn hits as consumer debt and delinquencies worsen.
  2. Political pressure on the Fed could lead to premature rate cuts that damage policy credibility, raise inflation expectations, and push markets toward extreme steps like yield-curve control.
  3. Even with macro risk and noisy year-end forecasts, there will be overlooked pockets of opportunity where active hunting for underpriced assets can produce asymmetric upside.

An Open Letter To Bill Maher

QTR’s Fringe Finance • 77 implied HN points • 09 Nov 25
đź’° Finance Monetary Policy
  1. The gap between rich and poor is getting bigger, which is a major problem that many people are angry about.
  2. Inflation is caused by poor choices in monetary policy, and both political parties share the blame for not fixing this issue.
  3. If we don't address these problems, we could face a serious crisis in the economy or a social revolt from those feeling left behind.

If Independent Agencies Are Unconstitutional, So Is The Fed

QTR’s Fringe Finance • 33 implied HN points • 30 Dec 25
🇺🇸 U.S. Politics Monetary Policy
  1. Separation of powers means executive agencies that wield real power must answer to the president, so the same legal logic used to limit other independent agencies applies to the Federal Reserve.
  2. The Fed runs core executive functions — regulating banks, shaping credit, and controlling the settlement asset — and appeals to history or technical expertise are prudential, not constitutional, reasons to shield it from political control.
  3. There are only two constitutionally consistent options: place the Fed under presidential oversight and accept political accountability, or remove discretion with strict automatic rules; the current system of discretionary, unaccountable central banking conflicts with separation of powers.

Monetary Policy Is Monetary Piracy

QTR’s Fringe Finance • 28 implied HN points • 06 Jan 26
đź’° Finance Monetary Policy
  1. State-run monetary policy acts like theft because creating money for private banks concentrates wealth with insiders and helps cause recurring financial crises.
  2. Money and banking should be separated from the state; legal tender laws and special banking privileges (like protections for fractional-reserve lending) enable monetary piracy and should be repealed so people can choose competing currencies.
  3. A free market for money, grounded in private property and competition, would produce sounder money and make financial actors accountable to customers rather than the state.

Trump Cards

Net Interest • 18 implied HN points • 16 Jan 26
đź’° Finance Monetary Policy
  1. Credit card interest rates are much higher than on other loans, and revolving balances generate outsized profits for banks while supporting a large share of consumer spending.
  2. Proposals to cap rates (for example at 10%) would lower costs for borrowers but risk making card products unprofitable, which could reduce credit access and consumer spending.
  3. Past regulations have led lenders to reprice products and raise spreads, so caps or fee limits can trigger unintended shifts in rates, fees, or product availability.

O governo surfa na competĂŞncia do Banco Central que apedreja

O Observador de Corcyra • 432 implied HN points • 03 Jul 23
đź’Ľ Business Monetary Policy
  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.

Repo Crisis Revisited

The Dollar Endgame • 199 implied HN points • 13 Feb 24
đź’° Finance Monetary Policy
  1. The repo market is crucial for global finance, and it broke down in September 2019, causing significant repercussions.
  2. The Federal Reserve has been deeply involved in the repo market to ensure the smooth functioning of the world's secured borrowing system.
  3. In September 2019, there was a sudden surge in overnight money market rates, leading to unexpected fluctuations and challenges in the financial system.

Saturday Macro: Fed Independence as Your Screentime-Limit Phone App

Brad DeLong's Grasping Reality • 199 implied HN points • 19 Jul 25
🇺🇸 U.S. Politics Monetary Policy
  1. Legal independence for central banks isn't enough to protect them from political pressure. Even with strong legal backing, central banks can still feel the heat from politicians, affecting their decisions.
  2. Under recent political pressure, inflation expectations have increased, even if central banks don't change their policies. This can lead to higher actual inflation, damaging the credibility of these institutions.
  3. The economic outlook may be shifting downward, with slower growth expected in the future. Keeping inflation rates above 2% is becoming more crucial as the economy faces different challenges.

A política monetária nos EUA se encontra em território restritivo?

O Observador de Corcyra • 412 implied HN points • 26 Feb 23
đź’° Finance Monetary Policy
  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.

Bonds are the Ultimate Shitcoin

The Dollar Endgame • 399 implied HN points • 17 Oct 23
đź’° Finance Monetary Policy
  1. Bonds are facing significant challenges with the Federal Reserve's interest rate hikes and inflation, causing a major downturn in the bond market.
  2. Bonds are crucial in the financial system and act as a form of money, affecting various sectors like banking and exposing risks in durations and interest rate movements.
  3. The bond market's current struggles are indicative of larger economic issues, with potential consequences for inflation, debt, and decisions by the Federal Reserve.

The Fed's Bullishness Is Pushing Up Rates

The Overshoot • 412 implied HN points • 21 Sep 23
đź’° Finance Monetary Policy
  1. The Fed is optimistic about the economy, expecting less need to suppress job market for inflation control.
  2. Fed officials anticipate keeping interest rates relatively stable in the coming years.
  3. There is a shift in Fed officials' projections, showing higher interest rates expected by end of 2024.

The Money Market Blindspot: Part I

Concoda • 508 implied HN points • 23 Jan 25
đź’° Finance Monetary Policy
  1. A funding squeeze is turning into a big increase in cash availability. This change is happening as market conditions ease, but new issues like the debt ceiling are causing uncertainty.
  2. The financial system has a lot less cash than it had in the past, partly because of changes in how money markets operate. There hasn't been serious funding stress recently, which is a good sign.
  3. Another cash surge is expected to hit the banking system soon. As the Treasury reduces its cash cushion, this could lead to more market volatility down the line.

Money Market Update

Concoda • 281 implied HN points • 20 May 25
đź’° Finance Monetary Policy
  1. Cash is flowing back into the money markets, leading to calmer conditions. This means there's plenty of cash available, which is a good sign.
  2. The recent panel discussions revealed that issues in the market were influenced by trade tariffs and how they affected different types of financial trades. Understanding these factors can help make better investment decisions.
  3. Despite some panic over the Moody's downgrade, experts believe it's not a big deal and the U.S. Treasuries are still a safe bet. Overall, it's a stable time to consider investing in Treasuries.

Ayahuasca and the Simulacrum

The Dollar Endgame • 359 implied HN points • 03 Nov 23
đź’° Finance Monetary Policy
  1. Jorge Luis Borges' fable "On Exactitude in Science" explores the concept of representation and the consequences of abstractions overtaking reality.
  2. Psychedelics like Ayahuasca can challenge our perceptions by dissolving the ego and blurring boundaries between the self and the external world.
  3. The modern financial system, with its heavy reliance on derivatives, has created a simulacrum that central bankers manipulate, leading to a dangerous dependence on fake money.

All Roads Lead to Inflation

Points And Figures • 746 implied HN points • 28 Oct 24
đź’° Finance Monetary Policy
  1. Inflation seems unavoidable and is likely to continue affecting the economy. It doesn't really matter who is in charge politically; the pressure on the markets suggests we're stuck with it.
  2. To manage during inflationary times, investing in commodities and hard assets like real estate may be smart. These investments can help preserve value even when the dollar weakens.
  3. The shift to private markets and sectors like technology and agriculture can offer chances to earn better returns that beat inflation. However, navigating these markets requires skill and good management.

Does the Federal Reserve Deserve Deference as a Bank Regulator? Kevin Warsh Says "No"

Brad DeLong's Grasping Reality • 269 implied HN points • 29 May 25
🇺🇸 U.S. Politics Monetary Policy
  1. Kevin Warsh believes the Federal Reserve should not have authority over bank regulation and should defer to the Treasury instead. This raises questions about what role the Fed really should play in the financial system.
  2. Historically, the U.S. economy has struggled during banking crises due to a lack of a strong central bank. Events like the Panic of 1907 highlighted the need for a central authority to manage financial stability.
  3. The effectiveness of the Federal Reserve hinges on its ability to monitor and regulate banks. Without this oversight, its role as a lender of last resort becomes less effective, suggesting bank regulation is crucial to the Fed's mission.

The Case For Sanity

QTR’s Fringe Finance • 26 implied HN points • 01 Jan 26
đź’° Finance Monetary Policy
  1. The market looks massively overvalued and some investors are positioned short major indexes expecting a significant pullback.
  2. Price action is being distorted by heavy monetary intervention, retail speculation, algorithmic momentum, and passive buying, so traditional fundamentals often aren't driving valuations.
  3. Consumer demand is weakening — inflation-adjusted retail sales are negative — which raises the risk that earnings and the market could come under pressure.

The NY Fed Trading Desk's Time to Shine?

The Overshoot • 373 implied HN points • 01 Sep 23
đź’° Finance 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.

Money Market Update

Concoda • 443 implied HN points • 01 Feb 25
đź’° Finance Monetary Policy
  1. The Federal Reserve is continuing its balance sheet reduction to avoid financial crises, with expectations of it ending by June.
  2. The U.S. Treasury might reduce its issuance of short-term bills to save costs, especially if the Fed maintains its current policies.
  3. Despite challenges like a strong dollar and global tensions, risk assets are anticipated to perform better than bonds in the near future.

How Much Change When BOJ Eventually Tweaks? Part 1

Japan Economy Watch • 139 implied HN points • 11 Mar 24
đź’° Finance Monetary Policy
  1. Interest rate changes depend on both BOJ policy and financial market conditions, and a policy tweak is likely to result in a gradual, minor impact on rates.
  2. BOJ's intention appears to be maintaining accommodative financial conditions by making small adjustments to policies like the overnight rate and yield curve control.
  3. BOJ's decision-making process is influenced by the balance of risks in moving too early or too late, with a focus on clear evidence of sustained wage growth before significant policy changes.

Liquidity, Not Logic: QTR And Epoch Times Talk Markets

QTR’s Fringe Finance • 21 implied HN points • 09 Jan 26
đź’° Finance Monetary Policy
  1. Stocks are driven more by liquidity and expectations of policy support than by the current health of the real economy, so bad economic news can sometimes lift markets even as it masks growing strain and creates moral hazard that shifts costs into inflation and weaker purchasing power.
  2. Market valuations look high by almost every historical measure, leaving little margin for error, so investors should be realistic about what they’re paying for and the future growth those prices assume.
  3. Speculation is concentrated in areas like crypto and parts of AI where downside can be sudden, and individual investors should read 10‑Ks, compare peers, understand debt and cash flow, and beware passive flows and index concentration.

The Real Mission of the Fed

In My Tribe • 607 implied HN points • 11 Nov 24
đź’° Finance Monetary Policy
  1. The main job of the Federal Reserve is to help the government borrow money easily and cheaply. This allows the government to spend on various programs, including wars and welfare.
  2. Despite originating to stabilize the banking system, the Fed has faced criticism for not preventing financial crises. Even after its creation, the U.S. has experienced repeated financial problems.
  3. Quantitative Easing, a method the Fed uses to handle money and loans, may need to end. This would help limit government debt and potentially benefit everyday Americans in the long run.

Lions and Lambs

Some Unpleasant Arithmetic • 11 implied HN points • 18 Jan 26
🌍 World Politics Monetary Policy
  1. Milei’s shock-therapy disinflation has stalled and even reversed, forcing a shift to slower, reserve-building policies; now the government must juggle a painful tradeoff between lowering inflation, rebuilding reserves, and keeping growth.
  2. Sustainable reserve accumulation is the linchpin for stability — without reserves confidence collapses, capital flight resumes, and the country risks sudden funding stops; relying on foreign borrowing or a hoped-for export/FDI boom is risky given big upcoming dollar debt needs and large private dollar holdings.
  3. A major evangelical presidential surge looks unlikely in the short run because Milei’s economic project both competes for the same support and hasn’t produced the large-scale displacement that typically fuels pentecostal political power, though long-term economic dislocation could change that dynamic.

Cutting Interest Rates Isn’t a Cure‑All for the Economy

QTR’s Fringe Finance • 18 implied HN points • 12 Jan 26
đź’° Finance Monetary Policy
  1. Cutting interest rates only creates a temporary boom with fake job gains and malinvestment that leads to a deeper bust later.
  2. A real recovery needs market‑driven interest rates, sound money, and fiscal restraint so savings and investment can realign properly.
  3. Labor-market problems are worsened by wage rigidities and regulations, so letting wages adjust and removing hiring barriers helps jobs recover.

The Fed Hits CTRL+Print Again

QTR’s Fringe Finance • 35 implied HN points • 10 Dec 25
đź’° Finance Monetary Policy
  1. The Fed cut its policy rate to a 3.50–3.75% target range.
  2. It announced fresh balance sheet expansion by buying Treasury bills, effectively restarting quantitative easing to add liquidity.
  3. The decision passed 9–3, showing some dissent while signaling a renewed easing stance that injects more cash into markets.

Mortgage Rates: The New Normal

CalculatedRisk Newsletter • 33 implied HN points • 11 Dec 25
đź’° Finance Monetary Policy
  1. year mortgage rates are about 6.3%, putting them back in a 6–7% range that may be the new normal similar to pre-2008 levels.
  2. Cuts to the Fed Funds rate don’t automatically lower long-term yields — the 10‑year Treasury has risen even as the Fed moved toward cuts.
  3. After more than a decade of unusually low rates, the current rise back to pre‑crisis ranges signals a durable shift in the interest-rate environment.