Happy Columbus Day!
As I discussed yesterday in my post entitled “The Perils Of Fed Tightening In One Chart (Or Sweet Home DC!) Treasury Yield Curve Remains In Reversion And Stock Market Declining As Fed Reduces Money Supply Growth,” The Federal Reserve is tightening its monetary policies to combat 40-year highs in US inflation caused by 1) Biden’s anti-fossil fuels mandates, 2) excessive and reckless spending by Biden and Congress and 3) excessive monetary stimulus from The Federal Reserve.
Another casualty of The Fed’s tightening and reduction in M2 Money supply are … the mortgage and housing markets. The US mortgage rate has soared to 7.04% (highest since 2000) and mortgage DEMAND has fallen to the lowest level in recorded history.
Here is my chart from yesterday showing the inversion of the US Treasury 10yr-2yr curve and decline in the S&P 500 index as The Fed tightens.
And then we have this chart showing the most-extreme foreign Treasury outflow since March 2020.
At least The Fed is predicted to start cutting rates again in March 2020.
Yes, Biden and Powell have reenacted Kevin’s famous chili spill. And Ben Bernanke, the creator of QE from late 2008 was just award the Nobel Prize in economics for distorting financial markets.