President Joe Biden should do an ad for his energy policies ala Game of Thrones, “Bundle up! Winter is Coming!”
Since Biden was installed as President in January 2021, natural gas futures prices are UP 216% and heating oil is up 199%.
The average price of home electricity has SOARED under Biden, as has the prices of many things.
Fortunately for Biden and Congress, they live in well-heated (and air-conditioned) digs in the DC area and are not exposed to the damage done by Biden’s executive orders on energy.
The U.S. Treasury market is showing signs of stress that may have implications for whether the curve keeps steepening.
Over the past month the curve has retraced from an inversion to a steepening driven by a surge in yields on benchmark 10-year bonds. That has led to interesting outlier indications, as traders weigh the outlook for Federal Reserve interest rate increases and inflation.
The US Treasury yield curve has settled-in at 20.383 bps (effectively zero) as The Fed continues its war on inflation.
On the SOFR front, we see SOFR Coupons being slow to benefits from Fed rate hikes. So, SOFR Coupons are behaving like Stouffer’s lasagna, frozen and tasteless.
On the other hand, mortgage rates continue to soar on EXPECTATIONS of Fed rate hikes.
Phoenix AZ leads the top ten at 30.4% with Washington DC lagging at 9.9%.
So, its official. The Federal Reserve is best exemplified by former Yankee/Mets first baseman “Marvelous” Marv Throneberry. When players presented Mets’ manager Casey Stengel with a birthday cake but neglected to give piece of cake to Throneberry, Stengel replied to Throneberry when asked why no cake, “Because I was afraid your were going to drop it.”
Just like The Federal Reserve, the honorary Marv Throneberry of the the global economy.
A measure of U.S. manufacturing activity unexpectedly dropped in April to the lowest level since 2020 as growth in orders, production and employment softened.
The Institute for Supply Management’s gauge of factory activity fell to 55.4 last month from 57.1, according to data released Monday. The Manufacturing Prices index remained elevated.
As the 10-year Treasury yield tries to breech the 3% barrier.
And as The Fed continues to threaten tightening of their monetary follicies, the S&P 500 index is down 14% since Dec 31, 2021.
And the NASDAQ had it worst monthly loss since 2008.
We now have the proverbial double whammy happening … soaring home prices AND soaring mortgage rates.
The theory is, of course, that The Federal Reserve will slowly remove its staggering monetary stimulus leftover from 1) the financial crisis of 2008 and 2) the Covid recession of 2020. As you can see, the sheer volume of monetary stimulus remains outstanding and it is the EXPECTATIONS of The Fed tightening that is caused the 30-year mortgage rate to rise.
While I used the Case-Shiller National Home Price Index YoY, Redfin shows more contemporaneous home price data with April 24 median home sales price at 16.8%.
Thanks to The Fed, we are seeing homebuyer mortgage payments are up 39.4% YoY.
As inflation continues to damage America’s middle-class and low- wage workers, we may see regulations going into effect from the Consumer Financial Protection Bureau protecting consumers from … themselves.
President Biden (or whoever is pulling his strings) is inflicting a “Medusa Touch” on the US. That is, everything his administration touches turns to stone.
Let’s look at average hourly earnings. Thanks to “progressive” energy policies from Biden, REAL average hourly earnings growth has crashed and burned.
But here is the chart that the Biden Administration touts showing average hourly earnings growth at 5.6% YoY (although I doubt if Jen Psaki would leave out the massive distortion caused by The Federal Reserve’s “Let’s go crazy!” monetary policy.
Another Medusa Touch moment is the reverse repo market. When I wrote about reverse repos before, several people wrote me saying “You don’t understand. This is a temporary problem and will vanish shortly.” However, The Fed’s reverse repo facility has now climbed to an all-time high.
Then we have the disruptive effects of The Federal Reserve deciding for us that mortgage rates are too low and should be higher.
Now look at lithium prices, a key element for electric car batteries. Making the switch from Internal combustion engines to electric motors far more costly.
The list goes on and on.
Suffice it to say, everything the Biden Administration touches turns to stone.
But I wager that the Biden Administration wishes that Hunter Biden’s laptop would turn to stone.
Only an elitist DC bureaucrat like Joe Biden would laugh at inflation that is ruining the lives of millions of Americans.
We all know (except for Biden apparently) that inflation is up 8.5% YoY as measured by the change in the Consumer Price Index (CPI). However, the CPI change doesn’t fully capture what is crushing Americans’ pocketbooks. Here is a brief update on where we stand prior to the upcoming Federal Reserve Open Market Committee meeting on May 4th.
Since Biden was installed as President on January 20, 2021, prices for key commodities have soared. Natural gas futures UP 192%, Regular Gasoline prices UP 73.6%, Commodity Research Bureau Foodstuffs UP 59%, Low sulfur Diesel futures UP 176%.
Since we now have the Biden’s Orwellian Ministry of Truth (actually The Department of Homeland Security’s “Disinformation Board”) which will start censoring free speech. And this post is what could fall under their reign of terror. Or in Biden’s case, reign of error.
Jen Psaki, the President’s talking head, has said that it is Russia and Putin’s fault. So, here are the same prices up to Russia’s invasion of Ukraine since Biden was installed as President: Natural gas futures UP 82.3%, Regular Gasoline prices UP 80.2%, Commodity Research Bureau Foodstuffs UP 50.1% ,Low sulfur Diesel futures UP 47.7%.
Yikes! So, even before Russia invaded Ukraine, the lethal combination of Biden’s green energy executive orders and The Fed’s continuing monetary stimulypto was deadly for American households.
On a sad note, The Biden Administration is considering cancelling student loan debt as a way to control inflation (?). Of course, cancelling student debt will lead to a surge in consumer spending and even MORE soaring inflation. Biden is suffering from The Medusa Touch. Everything he touches turns to stone.
While The Fed is expected to remove monetary stimulus, don’t expect inflation to return to pre-Biden levels. The anti-fossil fuels edicts from Biden are still in effect. Even if the bottlenecks clear up, Biden and Congress may unleash more Federal spending (although much of Federal spending benefits “Friends and Family” of Biden and Congress, not the American middle class or lower-wage workers).
Rising home prices and The Fed signaling an end to the perpetual punch bowl have resulted in the University of Michigan buying conditions for houses to hit the lowest level since 1982.
While bearish sentiment in markets highest since 2009 in the stock market.
I don’t get why Biden created a “Disinformation Control Board” led by Nina Jankowicz – a disinformation spewer. We already have disinformation media outlets like CNN, MSNBC, ABC, CBS, NBC, New York Times, Washington Post, etc., so why create a Federal control board? All in time for the midyear elections!!
If this move by Biden doesn’t terrify you, then you didn’t study history.
Not only has The Federal Reserve driven M2 Money Velocity to near historic lows, but now we find out that the Employment Cost Index just rose to a historic high.
Of course, a variety of minimum wage laws have helped drive up employments costs. Don’t tell lawmakers that minimum wage laws lead to higher inflation since they typically deny responsibility for anything. But I can almost picture the 4 Horsemen of the Inflation Apocalypse (Powell, Biden, Pelosi, Schumer) sitting around asking “What we can do to make inflation worse?”
We did see the PCE Deflator YoY rise to 6.6%, the highest since 1982, the highest in 40 years.
Personal spending increased to 1.1% in March, probably panicking buying over further inflation.
A PCE Deflator of 6.60% leads to a Taylor Rule estimate of 9.05% for The Fed Funds Target Rate.
M2 Money Velocity (GDP/M2 Money) peaked in Q3 1997, but after several bouts of Fed money printing, M2 Money Velocity is near the all-time low at 1.1216 In Q1 2022. And M2 Money stock is still growing at a torrid pace of 9.9% YoY. But the massive overreaction of The Federal Reserve in response to the Covid outbreak has led to near zero money velocity.
Now with The Federal Reserve considering removing the monetary stimulus, what will happen to US GDP left to survive on its own?
An example of how The Fed’s expected tightening of monetary policy can be seen in the meteoric rise in mortgage rates.
So, the US has hit terminal money velocity. I wish The Fed lots of luck going forward.
Is Charlie Sheen the Chairman of The Federal Reserve Board of Governors?? That must be Lael Brainard falling out of the sky with Charlie Sheen (aka, Jerome Powell).
While headline inflation is growing at 8.6% YoY in March, flexible price inflation grew at a terrifying 25% YoY rate.
Even with headline inflation of “only” 8.56% YoY, today’s Q1 real GDP growth checked in at -1.4% QoQ. Clearly, Bidenflation isn’t help the economy or anyone else.
Diesel prices have skyrocketed under Biden.
Instead of Shoeless Joe, we have Clueless Joe as President.
Confounded Interest - Anthony B. Sanders 
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