Skate to Where the Puck is Going
Despite Market Pullback, Jackson Hole was Nothing of Substance
Fed Chair Jerome Powell took to the microphone on Friday afternoon for the first time since he announced the Fed’s prior 75 bps rate increase. Powell has mastered the art of tactful political speech, as he used 10 minutes of words to say nothing of substance. While there was a small corner of the market that thought Powell would cavalierly announce the end of this tightening regime, most expected him to do precisely as he did – stymie overzealous doves that were high off the recent summer rally by using his oft-repeated rhetoric about preserving price stability while remaining data dependent thus leaving the door open for lower rate increases through the balance of the year.
We found the analysis below, put together by Jack Farley (@jackfarley96) at Blockworks, quite interesting. While not exactly something we would trade off of, it is fascinating to see how over the past 24 months, the Fed’s interests have shifted from jobs and supply-side effects of inflation to instilling fear in the market through hawkish language.
If anything, this should serve as another reminder that Powell and the Fed have been, and likely will continue to be, backward-looking. While this can be frustrating, it makes sense ...Reports you haven't read
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QRA IN LINE WITH MARKET EXPECTATIONS _THE RESULTS_ The Treasury’s quarterly refunding announcement (QRA) was the first of two major macro events to transpire on Wednesday. Leading up to this, on Monday, there was an indication that the net borrowing for the current quarter would be $760 billion, which is $55 billion lower than the initial $815 billion estimate, and the total funding needs for Q2 would be just over...
THE GBTC PROBLEM We have been watching spot BTC ETF flows closely since their launch two weeks ago, and while overall net flows remain decidedly positive, the market seems hung up on GBTC outflows. As a reminder, the outflows we care the most about are those from entities that are not rotating into other spot BTC ETFs. This is comprised of some speculative capital that played the run-up into ETF...
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