US stocks vs the Federal Reserve Funding Rate vs the unemployment rate vs 10yr-2yr treasury yields. When the 10yr vs 2yr yield goes negative it means that a 2yr treasury bond is yielding more interest than a 10yr treasury bond and it is also known as a yield curve inversion. The red vertical lines in the chart are drawn from yield curve inversions which are...
A lot of speculation and expectation around the FED raising the fund rate today and it's impact on Bitcoin's price.
If you compare the fund rate and Bitcoin's price you notice there is no clear long-term correlation.
I would aruge if anything then the more interesting comparison would be to compare Bitcoin (BTC) to the M2 money supply.
Endless money creation...
Interest rates scale is on the left, plotted in orange.
The last time we started hiking rates from zero, we saw a decent sell-off with the first hike. Then things became bullish with subsequent hikes, until it neared 2% where markets got volatile; and then at 2.5% where we see another sell-off. If history, that could put QQQ near -40% from ATHs. I'll be watching...
FRED:FEDFUNDS ECONOMICS:USIRYY ECONOMICS:US10Y
This is the same idea as the link mentioned but added inflation on the chart and the fed fund rate. This is bullish for bond yields!
Increases in the US Fed Funds rate during the FED's hiking cycles have always preceded a recession.
A simple analysis of the most recent recessions, the amount of rate hikes preceding them and the downward trending channel in which FED Fund Rates have moved suggest the FED only has room for 150bp worth of hikes (or a total of 6 hikes).
OANDA:SPX500USD FRED:FEDFUNDS
Forecast for Macro:
- Falling Wedge Breakout must be re-tested.
- Bear Flattener coming as short-term rates rise with Fed tightening expectations:
- 2x ATR spike in US02Y:
- The Fed members will probably all have their turn to make comments, leaning hawkish. This should cause a rally in the US02Y.
- Bonds Volatility Technically Bullish:
- However, this will...
Sure, low yield rate alone doesn’t justify the extremely high valuation of NASDAQ, but many investors may have overlooked other factors that may have contributed to NDX's rise.
Quick recap of recent macro events-
THE BAD
Corporate profits in the United States dropped 11.8 percent to USD 1,569.2 billion in the second half of 2020, following a downwardly...
Quick one here, given the world looks set to resume it's ludicrous experiment with negative rates in order to spur "growth" and encourage spending.
I thought it was only reasonable to see what effect the past decade of ZIRP (Zero Interest Rate Policy) has had on the personal savings rate.
Before we begin, i understand that the fed funds rate is not the explicit...
#spx #sp500 #fedfundrate - The Federal Reserve lowered the Federal Fund Rate today from 1.5% to 1% in the first rate cut outside of an FOMC meeting since Lehman Brothers collapsed in 2008. This came as the Federal Reserve Chairman, Jerome Powell, claimed that the economy is doing fine and unemployment is at a multi-decade low. If everything is so “fine”, then...
Charts:
- Top left = SPX
- Bottom left = Initial jobless claims (unemployment metric)
- Top right = US 10 year and US 2 year spread (Yield curve inversion metric)
- Bottom right = Fed funds rate (short-term interest rates)
It is no secret that US equities are grossly overvalued, from Warren Buffet to Stanley Druckenmiller to Ray Dalio, the smart money has made...
