Federal Reserve

“And remember, the CPI has already gone from nine percent last year, June, To now three percent. So we have seen significant improvements, even though the core measures that the Fed is most interested in is still at four percent.”

“If we do get a recession down the road sometime in 2024, Then you would think that bonds will do what they normally do, which is to protect investors from volatility, and again, last year, bonds were in the eye of the volatility storm, but now that yields are …”

“And a year and a half ago, the Fed was at zero, zero to a quarter. So it is one of the fastest, most aggressive rate hiking cycles that we've ever seen.”

“If you subtract the real yield of tips from the nominal yield of regular treasuries, you get an implied inflation rate, and that inflation rate is around two and a quarter, two and a half percent which is the market's way of saying that the Fed will be success…”

“So the full cycle tends to be five, six percentage points from two to three below what we would consider a neutral rate, which is generally thought of as about three and a half percent or so, to about two to three percentage points above.”

“You'd have to go back to 1982 to find a Fed moving this hard, this fast, hard line, no exception, and just hawkish all the way.”