These are certainly interesting times.
This past week we heard from the federal reserve with regard to monetary policy, and they did raise the federal funds rate 25 basis points moreover, the Federal Reserve also confirmed that more hikes are coming. The Federal Reserve had also made it clear that they want to start reducing the size of their balance sheet by the end of this year however, in light of the almost continuous round after round of bad economic news, in my opinion, the Fed is going to have a very hard time unwinding it.
The Federal Reserve has stated that they are going to, at one point, stop reinvesting in long bonds. What this means is the Federal Reserve has no intention of selling the long bonds that they currently hold, moreover, this also means it will take decades for the long end of the curve to normalize.
I still believe, firmly, that the short end of the curve is going to rise much faster than the long end and thus we will end up with an inverted yield curve.
We are also in a situation where both stocks and bonds are rallying at the same time.
Both stocks and bonds rallying at the same time is more a less an unusual situation, and something has to give at one point.
The way I see it is the rally in the bond market will continue at its current pace, which also means the yield curve will continue to flatten until it inverts. I also believe that stocks have the potential to rally further in the short run, but will in fact roll over as the yield curve again continues to flatten out.
In my opinion at this time, the Federal Reserve is going to have a very difficult time, if not an impossible time, attempting to normalize their balance sheet starting this year. Moreover, the fact that the Federal Reserve is already attempting to normalize interest rates by raising the federal funds rate and yet yields continue to drop, tells me loud and clear that the debt market is critical, and the Federal Reserve is way behind the curve.
Gregory Mannarino
Bitcoins Feds reserve will never happen! Open source baby
You can compare, how blooming was american economy, until 1913, when the FED was established. After that USA became fascist country with few corporations, owning the market
This is correct .
You are my first stop every day to get up to speed on what's going on in the market. No fluff, just truth.
Amen!!!!
Preach it @marketreport
The Fed is Useless and Criminal...
Greg my friend, you are the porn star of real financial news, always my first point of call whenever I need to know something important.
thanks 4 sharing
Great post. Following you.
Thanx...
upvoted... resteemed!!!
I need to stack more.... lol
Great information. Let's keep an eye on it all.
Lets wait and see what will happen soon. No need for panic.
Just make tons of cash... and live happy :)
Thank you so much for voicing your valued opinion.. This can't go on much longer.
The Fed will raise interest more...I think
End the fed
I think we're going to see the end OF the Fed primarily because they could very well end themselves!
Actually i think no one can end the Fed, but yes they would end themselves eventually
big thanks :)
Yield curve will FLATLINE by Sept - you heard it here first !
Your right and I believe that cryptos are the future and that we should be our own bank. Banks and governments are only in it for themselves at our expense. It is time they go the way of the dinosaurs.
Another great post Greg - Keep on keepin' on!
thanks for sharing
If you love America please read below article.
https://steemit.com/freedom/@jjyeshua/if-you-re-in-united-states-join-a-militia-now
The FED is DEAD!
Hi Gregory, good piece again man! Thanks for all the insights over the past year that I have ben following your work. And now also following you here! ;)
@Ozz
The Federal Reserve is and has been robbing us blind...
I'm hoping to see an end to their evil deeds soon...
@pocketechange
I do believe they their intention "is" to lose it.........
I do not see who will buy the debt of the FED. I agree with what you are saying.
I agree. They bought it because no one else would.
Stack metals with the profits you make !!!!!!!!!!!
Marketreport is my daily go to eye opener after that your videos, I would like to say to all the GOV shills and sheep you will never convince me that your propaganda and lies will make me change my mind, all it does is cause me to start paying attention more and more to Greg Mannarino and others listen to what he says" do your home work" and if you do you will be sitting pretty like me and not worrying about the Banksters, Prestitutes and any other entity.
A collapse is imminent on the horizon.
Whats worse they infect the whole world with their non sense currency.
Greg has anyone ever asked the fed if they believe that they will ever pay the debt off
Great post follow me anyone
Thanks Greg. I think a 0.25% interest rate increase is bigger than most think when the debt is 20 trillion and the bubbles are so much bigger than before.
It might be a lot sooner for something to give under the stress in the markets before rates get to 3-4%
Interesting as usual!
Very interesting times we're in. Does this flattening yield curve point to lower inflation as suggested by the experts? My grocery shopping economics tell me NO! Every time I grocery shop, portions are smaller and I am getting thinner (not such a bad thing). When is this going to explode?
Thanks for the great post Gregory Mannarino! I resteemed this.
Thank you for Posting...
This fed has it out for the Trump presidency. They will destroy his economic plans and make sure he is a one term president.
meep
Great post. Thank you for sharing.
The fed has a history of responding to late, and once again this is one of those times. That fact that they raised the rate, and then it followed by going lower shows like Greg said they are having a difficult time with the debt market. It is possible at this point due to not normalizing earlier that they have lost almost complete control when it comes to the debt market. They will attempt to raise again, and if it does again go lower they have likely lost it.
how to sell 4 trillions balance sheet? simple: crash the stock market at a slow pace to make money move from stocks to bonds. simple as 123
Open Source all the way for me, not to mention how exciting the block-chain is. I listen everyday, thanks for all your hard work, Gregory.
The Fed is always behind the curve - always lag time they don't consider. I will watch the bond market closely Greg, and Thank You for the post!
Great post Thank you for the info
Interesting. An inverted yield curve is against the interest of the banking industry.
Hey Gregory, check out my Gold Model please !
https://steemit.com/gold/@midastouch/the-midas-touch-gold-model-update-17th-of-june-2017
Done. Upvoted.
Maybe this time will be different, in looking at the past two divergences since 2014 when the bond and stock market have rallied, in both instances the bond market mostly corrected, which I find interesting. I can't tell you how this divergence will play out, but there is a long term trade here. Overlay the 10 year yield with the S&P 500 to see this current divergence.
Lol cant wait to see if the intrest rate actually goes up this time
Greg you are spot on!