Yield Curve – Overnight Fed Funds Rate Through 30 Years
Click on chart to expand.
- Using the Fed-Funds Rates as the zero-duration starting point, the yield curve is inverted for 99 quarters, nearly 25 years.
- If we use the 3-month T-Bill as the starting point (2.105%), the yield curve is “only” inverted for 58 quarters, 14.5 years.
New Home Sales
On Tuesday, a Census Department housing report showed New Home Sales Plunge 35.9% in the West, 7.8% Overall, Prices Down 8.1%
Also on Tuesday, Powell Chastised Trump and Praised Himself in one of the most self-serving Fed speeches in history.
Specifically, in a blast pointed directly at Trump, Powell proclaimed “The Fed is insulated from short-term political pressures—what is often referred to as our ‘independence.”“
What a hoot.
The Fed will cry uncle in July.
Expect at least one 25 basis point rate cut.
The market has a 100% chance of at least one cut.
Meanwhile – We Still Have Questions
Dear Jerome Powell, instead of patting yourself on the back and answering fluff prepared questions, how about addressing some real questions?
- Let’s discuss the Fed’s economic models and their miserable performance.
- Let’s discuss bubbles.
- Let’s also debate the Fed’s inflation expectation theory. I can logically show the theory is nonsense.
Please have a go at it, Mr. Powell.
Mike “Mish” Shedlock