There was a little March Madness on Wall Street. In fact, the month turned into an old-fashioned blood bath. But you wouldn’t have found any carnage in the stock market. In fact, the Dow Jones gained a decent 2.3% on the month. But beneath that glittery stock market stage (that attracts the most investor attention) there was some chaos in the orchestra pit. The normally sleepy bond market just experienced one of its worst months ever, and one of its worst quarters in over forty years, down almost 7%. The municipal bond market just posted its worst quarter since 1994, down more than 5%.
Earlier this week, Lael Brainard said the Federal Reserve will run off its balance sheet at a considerably more rapid pace than it did last time around. SchiffGold Friday Gold Wrap host Mike Maharrey thinks Brainard and the rest of the Fed officials suffer from delusions of grandeur if they think they can really pull this off. In this episode, he explains exactly why balance sheet reduction is doomed to fail.
Federal Reserve Governor Lael Brainard sounded a hawkish tone on Tuesday, promising to ramp up the inflation fight. As Peter Schiff put it in his podcast, the uber-dove started talking like a super-hawk. But the Fed members aren’t really going to be able to follow through on this inflation fight. In reality, they aren’t hawks. They’re chickenhawks.
When you change the definition of words, it can create confusion. This is exactly why politicians have worked so hard to change the definition of inflation. As a result, a lot of people are very confused. In this Friday Gold Wrap podcast, host Mike Maharrey explains how the meaning of inflation has changed and why it matters. He also talks about signals flashing from the bond and real estate markets.
Is the US about to go the way of Japan?
The Japanese yen tanked after the Bank of Japan vowed to buy an unlimited number of Japanese government bonds in order to hold the 10-year yield under its 0.25% target.
We’ve seen a number of inversions in the Treasury bond yield curve over the last couple of weeks. This is a recession warning signal.
In his podcast, Peter Schiff said the markets are right about the looming recession. But they’re not getting the whole picture.
The Fed FOMC minutes came out last week, signaling tighter monetary policy. Peter Schiff talked about the minutes in his podcast, arguing that the Fed can’t do what it says it’s going to do. If it does, it will crash the markets and the economy. And it won’t lower inflation.
The Federal Reserve pulled off a magnificent manipulation of the junk bond market, facilitated a massive wealth transfer from savers to speculators, pocketed millions of dollars, and then washed its hands of the matter.
In March 2020, as governments shut down the economy for coronavirus, the Fed slashed interest rates and launched a massive quantitative easing program. But that wasn’t enough, so the central bank took the unprecedented step of announcing it would purchase $750 billion in corporate bonds, junk bonds, bond exchange-traded funds (ETFs), and junk-bond ETFs.
A Reuters article by Stefano Rebaudo argued that the Federal Reserve might welcome a “bond market tantrum” that pushes bond yields higher. But does the Fed really want higher interest rates? And what would that mean for the economy?
Despite the post-pandemic economic improvement and wide expectations that the Fed will begin tapering quantitative easing in the near future, bond yields have remained stubbornly low. Ten-year Treasury yields remain stuck just above 1.3%.
Average Americans are worried about inflation, but the mainstream financial media doesn’t think they should be. Even though inflation is a hot topic, the conversation seems to primarily center around the notion that inflation is overblown. In this article, we explain why this mainstream media spin downplaying inflation is dead wrong.
