Comments
Transcript
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RGGeorge, great presentation - thank you. If the Fed eventually peg the 10 year, do you think they'll peg of the 30 year as well?
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JOAlways great to hear from George! How likely do you think the Fed will ramp up QE? If we enter a deflation / disinflation environment and bond yield stays low, will they be able to just back off from the "market"?
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DPI don't understand why the banks would be in a liquidity trap if their excess reserves went to six or eight trillion.
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SBGreat interview. Why doesn't the Fed set the price of a loaf of bread too? Surely this must be better than letting the customer and shopkeeper find a mutually agreeable and favourable price?
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BHGreat to see some comprehensive bond market analysis. The interesting development will be how the market reacts if the Fed succeeds in holding the long end of the curve down whilst inflation becomes manifest on main street. The price of food and other essentials are already beginning to lift here in Australia...
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MCGreat, great piece. While it's pretty basic, I would have to liked to hear some discussion around the Fed policy transmission vehicle with regards to Congress, i.e. it seems like JaPo is begging Congress to pass some fiscal spending bills so the Fed has something to buy and not trample over the long end anymore than it has. That TGA fund may be worth examining along with lack of M2 velocity. And the repo window for hedge fund junkies...;) I get so tired of hearing the "brrr" machine bit and the Fed can just print money so game on...lol. I thought the comments in the last 10-15 minutes were very telling that the can has been kicked down the road...similar to Raoul's framework on insolvency. Thanks!
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DSWell-developed interview. Thanks. IMO we are in uncharted economic territory caused by all reaction to the pandemic from governments to businesses to individuals. The US economy and the government were already in trouble before the pandemic. We do not know what is ahead, to our left or to our right. We do not even understand what is behind us as data were distorted by every type intervention. All interventions are just a stab in the dark hoping for the best. The world will emerge from this crisis. We will defeat or learn to control the damage caused by COVID-19. The markets are just the sum of everyone guesses as no one can really see through the looking glass. With all the money printing, the only outcome I am willing to bet on is asset inflation. The companies that will make it through will be valuable but may already be overpriced. The fact that a company can go up 25% in market cap after earnings confirms to me that no one knows. DLS
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LJHow the market will be affected by a negative interest rate in sometime long run? Crush or rally? I doubt FED is dare to set up a negative interest rate. It is the US, not Italy, not Japan, nor any other countries.
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lySuch a timely interview!
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PJNeed this sort of bond coverage on a regular basis, excellent
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FSWell done George! You laid out a succinct perspective on the outlook for rates. Hopefully we will see more of you on Real Vision. I also follow you on Twitter and appreciate capturing your streaming insight. We know that rates and the dollar are heart on sole of the markets. Thanks again for a very clear and rationale outlook. BTW - I sold all my long bonds last night, which I have held tightly since November of 2018. The easy money has been made and now time for some risk off vol.
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RLthere seems to be an issue with the transcript file , can you please check? ty
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NRAlways a pleasure to listen to George. 2008 called. It wants its inflation headline back. Pro-YCC argument is belied by the declining Fed purchases and huge Indirects in recent spectacular OTR auctions. YCC? Looks more like the bond market doesn’t believe the Fed narrative on current ‘hot’ inflation nor for that matter do Eurodollars. That’s the biggest money calling bullsh*t. Wages stagnant, employment down, rent down, demographic drag, oil not moving, copper stuck....etc. Until Fed resorts to Window Guidance for banks...do it or we won’t backstop you (Bear Stearns 1998 mistake)...to juice loan growth, there will be no consistent inflation. Does that require a change in Fed Reserve Act? Don’t know. We are setting up more rent-seeking leverage for speculation not innovation.
Chapters
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Current Macro Overview
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What Tools Does the Fed Have Left?
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Making Sense of Fed Commentary and Actions
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Real Rates and the Fed’s Role in the TIPS Market
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Problems with Yield Curve Control
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Can the Fed Avoid Japanification?
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Short-Term Outlook for Prices
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How Could Pre-Election Stimulus Affect the Bond Market?
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When Will the Levered Players Return?
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Will the US See Negative Rates?
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Long-Term Outlook