It's not just USTs. Rates are falling all over the world faster in shorter maturities than long. That means a global wave of un-inversions and bull steepening right as more and more central banks plan to accelerate their own rate cutting. All of it for the same reason. Globally synchronized. ***CHECK OUT EURODOLLAR UNIVERSITY's FALL SALE*** https:/…

Chinese authorities held a surprise press conference early this morning where PBOC Governor Pan Gongsheng did his best Oprah Winfrey impression handing out rate cuts to practically everyone. All that does is further expose the gravity of the situation: the more the central bank or any authority does, the worse you know it is since rate cuts never w…

More confirmation that recession is coming back with a vengeance in Europe. The latest data indicates the dangers this time around including jobs and layoffs. This situation in Europe is hardly unique. This is why central bankers are out in force downplaying their own rate cuts; to the point a few policymakers are outright lying why they voted for …

The Fed just cut its benchmark rate by 50-bps even though jobless claims are among the lowest in their history. At the same time, CPI shelter prices have accelerated. Neither seems like it would warrant the Fed action yet there are good reasons to believe true unemployment is very different from claims and current market rents are plunging. Eurodol…

FedEx's CEO admitted some truth about the Fed's rate cut this week, and the stock was immediately punished for it, dropping 15% on Friday. This raises a bunch of questions, starting with: what happens to stocks in general when the Fed cuts rates? The answer is not what you think. Eurodollar University's Money & Macro Analysis CNBC FedEx quarterly p…

Now that the Fed has done it, everyone wants to get in on the act. They call it "undershooting" which is just a fancy word for "bonds were right." Switzerland, Canada, even the Europeans all thinking hefty and accelerated schedules. Leave it to the Brits to be the lone exception. Eurodollar University's Money & Macro Analysis Bloomberg Bank of Cana…

The Fed cut its benchmark rates by 50 bps in a panicky move to catch up to both the economy and the marketplace. Reaction in the latter was muted because this wasn't unexpected. All the FOMC did was confirm everything - and then deny that it did. Eurodollar University's Money & Macro Analysis Bloomberg Fed Minutes Show Officials Rally Around Higher…

People imagine a recession is when masses of people are being laid off and so consumer spending isn't just negative, it must be crashing. While those can happen in a downturn, they tend to show up at the end. So, if you're waiting for those to make a determination you'll be way too late. Evidence consistently and conclusively shows hiring not firin…

Americans' hopes and dreams of better opportunities have utterly crashed and burned over the past five months. This isn't about more price increases, rather how those in the past have combined with recession prospects to rob the future. The 2020s have taken the worst aspect of the 2010s and added more trouble on top. Eurodollar University's Money &…

Consumers can't afford groceries, so how is a lower reverse repo rate going to help them? Now that it is settled the Fed will cut rates next week, everyone wants to know by how much. The real story is what's behind the cuts in the first place and what that means for financial markets as well as the economy. It isn't the murder hornet rate. Eurodoll…

Authorities in China continue to do everything they can to derail the country's globally synchronized bond rally. It continues to hit record low yields anyway in spite of increasingly desperate government efforts. But why? More ugly data on banks, incomes, and Chinese jobs shows bonds are right, and not just about what's already happened to this po…

The ECB cut rates for the second time, as expected, though amidst a strong bond/bund market rally that has now completely un-inverted that yield curve. This comes at a time when major businesses like Volkswagen are thinking about closing down factories due to how much idle capacity they have. What links all of these together, what explains all the …

It was all banks all day yesterday. Basel rules foul-up. Warren Buffett continuing to dump BofA. Citi dumping on credit. Deutsche unloading CRE, or trying to. JP Morgan downgrading...itself. Most of all Ally Financial admitting unemployment is fast becoming a big problem and right on its balance sheet. Eurodollar University's Money & Macro Analysis…

There's no September here as interest rates continue to plunge. The two-year UST is at a record low relative to the Fed. In the past when the two-year has dropped like this it has meant nothing good. Combined with the still ongoing crash in energy prices, we have a solid sense of what's coming next. And it isn't just a lot of rate cuts. Eurodollar …

Interest rates continue to collapse in China even outpacing US Treasuries. Commodities are being crushed as prospects for the world's two largest economies are getting worse by the week; by the day. Over the weekend, the Chinese reported negatives in consumer and more so producer prices, adding more evidence to what is shaping up in bond markets an…

We know there are Fed rate cuts coming in September and that there is very good chance it will be 50 bps. Could policymakers also surprise by ending QT (not that it matters)? Might that be a first step toward the next QE? It's not as far-fetched as you may think; after all, some at the Fed were talking rate hikes just two months ago. Eurodollar Uni…

More meltdowns across key markets, starting with the Treasury curve rapidly unwinding. Commodities are getting crushed, gasoline absolutely smoked. Swaps. Yen. The August payroll report only further confirmed the reasons why all this is happening. Eurodollar University's Money & Macro Analysis Bloomberg OPEC+ Pauses Oil Supply Hike in Effort to Rev…

Politicians always feel the need to do something even if they don't know why or what's actually wrong. That's all "price controls" really are since they sure don't control anything like prices. Unknown to most people, the US has already experimented with them running price and wage restrictions for several years. The results are conclusive. Eurodol…

Carry trade is back! In reality, it never left. Not because of BoJ rates hikes or threats, rather all the growing evidence the US isn't at risk of recession, so many indications showing it's here. Oil and gasoline are crashing. Curves unwinding. Forward rates project...a total mess. In time for all of the fun, JOLTS shows job openings plunge and la…

While the world was focused on financial volatility and liquidations at the start of August, something odd happened at the Federal Reserve's Discount Window (DW). Given everything else that has gone on since then, starting with the yield curve then considering now-cracking commodities, plus foreigners' dollar buffers and even US dealer banks' colla…

Wholesale gasoline prices plunged in August to their lowest since the start of the year. This sounds like a positive, both for consumers as well as Fed policymakers and the disinflationary impact on consumer prices. But refinery margins have crashed to their lowest in three and a half years which instead points to more and bigger trouble. Eurodolla…

The most significant macro data from the past week certainly wasn't GDP (it wasn't even the most important datapoint within its own series), instead it was personal savings. It is yet another confirmation of what we've been hearing from across the economy and markets. Consumers are tapped out, and they're out of money because of jobs and incomes. E…

People keep saying the economy is in the toilet and the US government keeps raising its estimate for GDP. The general public isn't wrong, GDP is. How do we know? Because that's what GDP says - its other side. Not as well known, it should be because this is the one which is far more accurate during cyclical downturns. History, academic studies, cons…

New information from various sources all around the US service sector shows a downturn taking hold in that segment with employment signals turning more and more negative. It confirms the ongoing and more decisive bull steepening continuing to take shape in the Treasury market. Even mainstream sources are having to cover the fact there is something …

German observers are saying the economy has reached crisis proportions and the reason is what the US economy's weakness is doing to the rest of the world. Rather than recover as many in Europe had hoped, the situation has turned grim due to America's growing negatives. As one result, bulls are firmly in charge of all the curves. Eurodollar Universi…

Chinese e-commerce retailer Temu becomes the latest global consumer business to warn about the economy - exactly what bonds have been doing all year much to the growing frustration of authorities. They'd rather derail lower market rates at the same time as cutting their own? It actually does make a lot of sense as all these things are related. Euro…

Just as low interest rates are being validated in every way, some Economists like Nouriel Roubini are alleging that yields are instead being held down by noted monetary genius Janet Yellen who has the Treasury Department engaged in a form of stealth QE. The problem is actually Economists who think interest rates are nothing more than tools to be ma…

Jay Powell's Jackson Hole appearance and speech wasn't really about rate cuts. It was a sales job trying to sell you and as much of the world as possible on the Fed itself. Just making the pitch, however, means implicitly admitting the US economy just leapt out of the frying pan and into the fire. Powell says it's OK because he knows how to turn th…

It wasn't just a pivot, Powell admits the US economy is in trouble as unemployment has already started rising. While that's it's own can of worms, there are also more monetary and financial considerations related to what happened early in August. CLOs, collateral, stock market liquidations, all tied to what the Fed just agreed to. Eurodollar Univer…

The economy really has deteriorated quickly, enough that what seemed highly unlikely if not impossible early in July was very near to happened at the end of the month. I said a July Fed rate cut was in play on the 3rd and now according to the FOMC's minutes...it was. That, along with panicky central bankers seeking to quicken the pace of cutting, i…

Was Macy's the latest victim of the strong labor market? That doesn't make sense, of course, and now the government data has been revised massively lower to better align what really happened last year with where we are this year. The new figures show not just one-third fewer jobs gained, more importantly what that does the rate of change in the rat…

Gold jumped to another record high at the same time stocks are back closing in on theirs. Only two weeks after global financial chaos that has everyone wondering where things are heading, the implications of each could not be more different. So, where does everything else stack up? Is it just gold vs equities? Eurodollar University's Money & Macro …

Economists and officials therefore the financial media continue to downplay the plunge in US consumer confidence, repeatedly referring to it as a "vibe-cession" that doesn't fit with the current data or modeled forecasts. History, common sense, and even econometric math isn't on their, or the data's, side. All of those say unemployment is about to …

Revisions are a normal part of high frequency data. Constant, near-exclusive downward revisions are not. Rewrites should be more evenly distributed which means these stats are overstating the economy. Plus, the problem is spreading hitting retail sales and IP as well as payrolls. While everyone went nuts over retail sales, the problem with July's n…

Financial volatility. Recession conditions. Lower growth and inflation. The rate cuts are still coming. So, that means interest rates around the world are about to go...UP? The fundamentals haven't changed - the calendar has. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU…

Steel prices are plunging, down a quarter since May at lows not seen since 2016. The chairman of the world's largest producer just said he expects it to get much worse in terms of prices and for industry. The implications are far broader than steel or China. Eurodollar University's Money & Macro Analysis Bloomberg World’s Biggest Steel Producer War…

This was supposed to be all about "inflation" and instead everything is coming up jobs - including the latest CPI report. From Home Depot's most recent admission to now US refiners taking drastic steps to avoid getting caught with an energy glut (yep, that's right), the entire economy flipped from "sticky inflation" to Uh-Oh over employment. Eurodo…

While the world was distracted by US recession provoking a Japanese stock market crash, China was continuing to meltdown. In just the past few days the country reported: a record drop in foreign money fleeing China; the first contraction in bank lending to the real economy in nineteen years; record low market interest rates; and the PBOC going off …

How in the world does sudden fear over a US recession lead to a crash in Japanese stocks? Even more important, what might that crash suggest about the US recession? Our world is more interconnected than you've been led to believe. Our entire economic worldview is oriented around national groupings not because that’s the way the world works but beca…

After a chaotic, somewhat panicky prior week, the talking points went out with a clear aim to restore calm. That meant downplaying every last concerning development, starting with Jeremy Siegel. Sure enough, he played along and on it went from there. Even Fed officials know what's coming yet they'll keep denying anything's wrong right up until the …

Though calm was restored after a wild few days in global financial markets, key market signals remained steadfastly negative. One of the most crucial of those even dropped to a level we've only seen three other times in more than 35 years - all three some of the worst cases. Moreover, that one was corroborated by a record low for swaps also set thi…

Last week, the markets and the media melted down over well-founded recession fear. This week, in the aftermath, everyone will say it was all overblown. That's just normal. Meanwhile, the actual recession continues to progress and the data keeps showing momentum is all on that side. This includes yet another signal strongly correlated with unemploym…

The date July 11 keeps coming up in a lot of different markets, starting with stocks. The Nikkei's last all-time high was on that day and so was the NASDAQ's. But July also features prominently in commodities and even Treasuries. The reason for it confirms so many suspicions about what just happened this past weekend therefore what it means going f…

When even big-name mainstream Economists are begging the Fed for emergency rate cuts, you might already have the sense this wasn't just a one-weekend show. US recession scrambles a lot of fundamental perceptions and values, causing a substantial and sizable repricing across asset classes. That repricing just happened to be most obvious and violent …

Japan was the epicenter for a wave of liquidations in smashing financial markets all over the world. It had all the telltale signs of a collateral and margin call. This wasn't about Japanese banks or even Japan, rather the sudden realization over the US soft landing narrative going up in smoke triggered a monster repricing and revaluation. So, what…

The July payroll report confirmed the US economy is heading for trouble. Key parts of it showed recession has likely already begun. As reality dawns across the marketplace, focus turns to what comes next now that the soft landing didn't land. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.c…

With the questions of "what" and "when" now mainly answered, we can finally focus on "how bad." To start putting together some answers, we'll use three different markets and sets of indications each examine a separate aspect of the recession proposition; short run, intermediate, and the long term. Eurodollar University's Money & Macro Analysis http…

A whole bunch of bad data, much of it focused on deterioration in the US labor market (pre-July payrolls). That unleashed huge swings in rates markets and forward rates. One reason for all this is the historical pattern is perfectly clear. What we're seeing right now happens EVERY TIME. No exceptions. Eurodollar University's Money & Macro Analysis …

Central banks don't hike rates during a recession. Or do they? The Bank of Japan just did and for the second time. By doing it, BoJ is laying itself bare; both in terms of transparently acting politically and maybe more important exposing the lie about interest rate policies. Peter Pan is not happy. Eurodollar University's Money & Macro Analysis Ba…

Hiring in the US absolutely plunged in June, so much you really have to see it to believe it. At the same time, global fast food giant McDonalds reported lower same store sales for the first time since 2020. The reason why people can no longer afford to eat as much under the golden arches isn't necessarily price changes, what's changed recently is …