Consumer Economy
Durable Goods (DGORDER) DELAYED
Gross Domestic Product (GDP) DELAYED
Personal Income (PINCOME) DELAYED
Credit & Rates
Fed Balance Sheet (WALCL) 6.59T -2.5B (-0.04% w/w)
Total Bank Credit (TOTBKCR) 18.83T +24.3B (+0.13% w/w)
30 Year Mortgage Rate (MORTGAGE30US) 6.17% -2 bp
Fed Funds (b) 3.87% -25 bp
3 Month Treasury (DGS3MO) 3.83% -10 bp
1 Year Treasury (DGS1) 3.71% +13 bp
10 Year Treasury (DGS10) 4.10% +8 bp
30 Year Treasury (DGS30) 4.67% +8 bp
The Fed declared that QT is now over; you can see from the chart that QE = EASY, while QT = HARD. In terms of scale, the 1.3 trillion (produced by “magic money machines”?) hiding in the Cayman Islands comprises about 25% of all the money printed by the Fed since the Safe & Effective (Event 201) printing operation started back in late 2019.
Mostly as a result of the Fed announcement on Wednesday, money moved into the short-duration 3-month items (red), and out of literally everything else. If you look at the math, the market is pricing in “No More Cuts For You” – and longer term, it sees higher rates ahead. The most exciting move: a 13 bp increase in the 1-year. That provides (perhaps) a time horizon too.
Near term: no cuts. Longer term: inflation. TLT was not pleased at this outcome [-1.29%].
The CME Fedwatch Tool appears to be a lagging indicator; it predicts a 63% chance of one cut on the Dec 10th meeting, while the 3-month treasury (red line) is currently predicting no cuts at all.
Currencies
The buck de-confettied strongly this week, rising 0.88 [+0.89%] to 99.63. This marked a new 6-month weekly closing high. The dollar rally started right after Powell said (during the Fed press conference on Wednesday, around 14:35-14:40) that another rate cut is not a sure thing. The dollar rally lasted through the afternoon on Friday.
Losers: EUR [-0.78%], GBP [-1.22%$], JPY [+0.85%]
Winners: AUD [+0.48%]
Immediately after Powell said this on Wednesday, the JPY and the Euro started to turn into confetti.
by wotthecurtains 
