Send us a text This week, we break down the tension between Jerome Powell and Donald Trump—and what it actually means for monetary policy. If you listened to Powell’s latest remarks at the Economic Club of Chicago, you may not have thought much of it, but anyone knows how to decode the Fed’s deliberately vague words noticed unmistakably hawkish tone. We explain how to read between the lines of Fed speak, what it really means when the Fed prioritizes price stability over growth. We also get in...
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Send us a text This week, we break down the tension between Jerome Powell and Donald Trump—and what it actually means for monetary policy. If you listened to Powell’s latest remarks at the Economic Club of Chicago, you may not have thought much of it, but anyone knows how to decode the Fed’s deliberately vague words noticed unmistakably hawkish tone. We explain how to read between the lines of Fed speak, what it really means when the Fed prioritizes price stability over growth. We also get in...
154. Bond Market Chaos: Unpacking the Basis Trade Blowup Theory. Cause...or Convenient Excuse?
The Wall Street Skinny
1 hour 12 minutes
4 days ago
154. Bond Market Chaos: Unpacking the Basis Trade Blowup Theory. Cause...or Convenient Excuse?
Send us a text There has been some speculation that the reason for "chaos in the bond markets" isn't loss of confidence in the US but rather the result of an unwind in "the basis trade" leading hedge funds to blow up and causing yield spreads to widen. To explore this theory we need to get super granular. We go deep into the relationship between cash bonds, futures, and interest rate swaps—and explain why so many market participants prefer the derivatives over buying Treasuries outright...
The Wall Street Skinny
Send us a text This week, we break down the tension between Jerome Powell and Donald Trump—and what it actually means for monetary policy. If you listened to Powell’s latest remarks at the Economic Club of Chicago, you may not have thought much of it, but anyone knows how to decode the Fed’s deliberately vague words noticed unmistakably hawkish tone. We explain how to read between the lines of Fed speak, what it really means when the Fed prioritizes price stability over growth. We also get in...
