FATT News and Press, Fat Tail Risk ETF From 07/07/21

During much of last quarter, the Atlanta Fed’s GDPNow model indicated an annual rate over 10% for the second quarter, but last Friday, they downgraded their estimate to the lowest number we’ve seen since the quarter began - an annual pace of just 7.8%, down from +8.6% on Jul...

Was the Fed message a shift in reaction function or economic outlook? Heightened rate sensitivity from incoming jobs and economic data. Strap in for a bumpy market this summer. For further details see: Will Interest Rates Rise As Jobs Recover This Summer?

Risk-adjusted performance for the Global Market Index (GMI) continued to push higher in June, based on the annualized Sharpe ratio for a rolling ten-year window via monthly data. GMI’s 10-year SR increased to 0.84, the highest in 18 months. GMI is an unmanaged, market-value...

As we mark the halfway point of the year, the economy is in full recovery mode and asset prices are soaring. As we enter the second half of the year though, it is hard to ignore some contradictions. Economic growth in H1 is going to print a big number, and yet, the 10-year Treasury no...

Reverse repurchase agreements have exploded to a trillion dollars in money that the Fed is sucking out of the financial system. The Fed is effectively being forced by interest rates within the intra-banking system to take as much cash out of bank reserve accounts as it is adding via i...

Investment uncertainty is focused on the nature of the current spike in inflation, which the Fed argues is transitory, though a growing number of people do not buy this narrative. Historically, the Fed has never been able to head off any longer-lasting inflation uptrends without a recessi...

The first signs of inflation have bubbled up in the market. It is unclear if inflation will be sustainable, but the risks of entering a new inflationary regime need to be considered. Many see a return to the pre-COVID environment of secular stagnation. But a breakout to higher inflati...

MSCI US REIT Index rallied 2.7% in June, which marks an impressive run of eight consecutive monthly increases. The Russell 3000 Index jumped 2.5% in June, the fifth straight monthly advance. Comparing GMI to US stocks and bonds shows that global asset allocation remains competitiv...

The most recent data from the Bureau of Labor Statistics show that CPI rose by 5.0 percent over the past 12 months. This is the highest rate of inflation since before the 2008 financial crisis. Swings in the price of oil are why many economists rely on “core” rates of in...

Inflation has been so low for so long that most of us can’t remember what it’s like to see the prices of goods and services rise in a way that we actually notice. While many have been concerned about government debt for a while now, the amount of money we’ve print...