Milton Friedman famously said that “Persistent inflation is always and everywhere a monetary phenomenon.” I have never been much of a monetarist because I thought there were many other factors influencing inflation, particularly demand factors, technological innovation, demographics, and the presence or absence of animal spirits among investors and capital providers.
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Last week’s ADP payroll report really rocked the bond and stock markets. It was further support for the Fed to remain tighter for longer. This chart shows how strong private employment growth was.
On the other hand,
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Last week was my birthday, and I chose to celebrate it by heading to my home in the desert to check out some work that had been done and to play tennis. This picture from my car dashboard shows a couple of pieces of interesting information.
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Last week I discussed how recessions have not occurred until an inverted yield curve reverts to being positively sloped such that long rates are higher than short rates. I wanted to do a bit of a deeper dive to see what it means for employment peaks.
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Fed Chairman Jay Powell understandably garnered a lot of attention after the Fed meetings concluded last week, which resulted in the first pause in rate hikes after 10 consecutive increases. At the same time, to manage expectations, the Fed dot plot forecasts two more interest rate hikes before they’re done for this cycle.
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I had the great privilege to attend the French Open at Roland Garros on June 4th. We saw two women’s matches and one men’s match involving Novak Djokovic. This was the first time I saw Djokovic play in person, so I was really happy we had tickets on the day he was playing on center court.
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With the exception of writing about interest rates. I do make a concerted effort to have content on my blog be fresh and try to avoid repetition. With that being said, however, there is only so much one can write about that is novel and insightful.
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Renter Nation
Here is my latest video discussing the transition of the United States from a society and economy that was completely homeownership centric to one that has become much more of a Renter Nation. We at CWS believe this is a trend that has some very powerful economic,
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Last week we had our annual investor meeting. It was the first time we met in person since 2019. It was so nice to be together again. Despite not communicating the rosiest of messages, it was an evening that had great positive energy.
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As this chart shows, the yield continues to invert with 3-month Treasury Bill yields substantially higher than 10-year Treasury Note yields.
As I wrote about previously, Fed Chairman Jay Powell discounted traditional yield curve indicators such as the differential between 10s and 3-month T Bills and 10s and 2-year Treasury yields.
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