Loading ...April 8, 2018, 6:44 PM EDT
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Forward curve for 1 month overnight indexed swap rate inverts
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Fed policy mistake possibly being priced into market: JPMorgan
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The forward curve of a closely watched proxy for the Federal Reserve’s policy rate has slightly inverted, signaling investors are either pricing in a mistake from central bankers or end-of-cycle dynamics, according to JPMorgan Chase & Co.
The inversion of the one-month U.S. overnight indexed swap rate implies some expectation of a lower Fed policy rate after the first quarter of 2020, the bank’s strategists including Nikolaos Panigirtzoglou, wrote in a note Friday.
“An inversion at the front end of the U.S. curve is a significant market development, not least because it occurs rather rarely,” they said. “It is also generally perceived as a bad omen for risky markets.”
The negative market signal comes as investors grapple with higher short term borrowing costs, which have risen in the U.S. to levels unseen since the financial crisis. While the strategists admit it is difficult to discern which of the two explanations for the curve inversion carries more weight, flow data suggests it is more likely to be rising expectations of a Fed policy mistake.
Does he think he’s a twitter wizard? “Alakazam, so it is tweeted, let my will be done.”
“These are not the tariffs you are looking for” – *Obe Wan TrumpNobi waves hand in front of Xi’s face*
Maybe he’s just crapping his pants about what the market will do on monday.
live by the bubble, die by the bubble
The Donald Nailed It: ‘We Are in a Big, Fat, Ugly Bubble’ – Sept 2016
https://www.newsmax.com/Finance/DavidStockman/donald-trump-bubble-econo…
Trump on Dow 20,000: ‘Now we have to go up, up, up’ – Jan 2017
http://money.cnn.com/2017/01/26/investing/trump-dow-20000/index.html
“We have the greatest economy, maybe ever in history. The greatest economy we have ever had” – D.J.Trump March 2018
https://nypost.com/2018/03/29/trump-tells-union-crowd-that-us-has-best-…