FATT News and Press, Fat Tail Risk ETF From 06/22/21

Last Tuesday, while the Federal Open Market Committee was meeting in Washington, DC, the Labor Department reported that the Producer Price Index (PPI) rose 0.8% in May, which is significantly higher than the economists’ consensus estimate of a 0.5% increase. Food prices rose 2....

The longer a period of elevated inflation - or at least fear of elevated inflation - persists, the higher the risk that a perceived transitory phenomenon could become permanent. We still believe this period will be transitory, but the transition period looks longer and wobblier than p...

Many will disagree that the Fed has already hiked rates, but it has. Just by 5bp, and only techncial, but there is still an impact. Pricing the front end with the excess of liquidity is tough, but it still looks too low (in yield). The long end looks a bit lost now, having flatten...

Fed officials embraced higher 2021 inflation as contributing to their medium-term policy objective, opening the door to a 2023 lift-off. We see this shift as consistent with the Fed’s new framework, implying a much more muted response to inflation and supporting risk assets. ...

The question is - given the low in March ’09 and the previous highs exceeded in late April ’13 - is the secular bull market 13 years old or just a little over 8 years old, and does it matter? Not only are the S&P 500 and Nasdaq bumping all-time highs, but Europe and ...

I think the Fed is generally terrible at communicating things to the outside world. Stocks are a very good inflation hedge in the long run. If you want to gamble, at least be smart about it by using products that aren’t guaranteed to kill your portfolio in the long run. ...

Last week the Fed met, and for a few hours everyone thought it meant one thing, but by the next day, everyone had decided that it didn’t mean that at all. In the end, bond yields barely moved and the outlook for the economy only changed mildly. The 10-year Treasury note yield w...

At the FOMC meeting, the median outlook for core inflation this year drifted up to three percent from 2.1 percent (though the long-term inflation outlook didn’t change). Of more direct market consequence, the median “dot plot” around the Fed funds rate in 2023 had...

As the dust settles, the implications of the ECB and Fed June meetings are subtle. EUR rates should be shielded to an extent from a hawkish Fed, but if the outlook deteriorates, long-end rates will continue falling. This is a bond market that refuses to bow to contemporaneous macr...

The latest update for the June 2021 central bank conclave shows several more voting members projecting the first rate hikes to begin toward the end of next year, a supposedly very hawkish shift from the last time. While that may be true, it also doesn’t mean anything, especiall...