FATT News and Press, Fat Tail Risk ETF From 09/14/21

The ECB is looking through higher headline inflation and inflation swaps. We doubt these will be enough to change easing expectations in December, but hawkish comment risks will remain a threat to carry trades. In the US, inflation prints have not affected breakevens much in recen...

As the economy continues to recover, market participants will concentrate on two critical areas: the employment picture and policy decisions made by the Federal Reserve. The jobs picture and Fed decisions could create volatility for commodities, stocks and bonds in the months ahead. ...

The current slowdown was telegraphed by the bond market, and we’re now in the midst of it. There are any number of reasons to think the economy will just keep fading all the way back to the pre-COVID trend of about 2%. I don’t see any reason to believe we are near recess...

Treasury Secretary Janet Yellen said that the government will run out of money by the middle of October, sooner than expected, and that Congress needs to act pronto. With all the hyped-up performative bloviating about the debt ceiling, it’s easy to forget that raising the debt ...

A proposed $3.5T spending bill, with division among Democrats on size. Areas that are ripe for cutting down include some social spending like affordable housing. The debt ceiling issue is fast approaching, which will be another headwind to keep an eye on. Strategas' Washington Res...

The ECB reduced PEPP purchases without causing a hawkish reaction. Its secret? Fanning hopes of more easing in December. We think an acceleration of APP is now the market’s base case, thus putting carry traders in the driving seat. Core rates should tread water from here, u...

“Real” rates are the interest rates that an investor receives after adjusting for inflation - in this sense they are the “real” yield you receive from owning the asset. With economies still chugging along and yield-eating inflation rising, investors are pil...

The missing, but long-overdue correction in stocks is probably a factor of the relentless pumping of electronic dollars into the financial system at a rate of $120 billion per month, causing the Fed balance sheet to rise to $8.349 trillion at last count. Suppressing bond market volati...

Green issuance remains a hot topic after the summer. This is not only as Germany launches a new 10Y today, but also as the EU prepares its entrance to the market to become a significant player. Supply also looms for USTs today, meaning they could remain in the driving seat a littl...

Despite the lowball jobs total on Friday, plenty of good news is buried in the small print, like massive revisions to the previous two months. In addition, Hurricane Ida may have suppressed reporting of August payroll data. There are some more clues in the ADP reported last Wednesday,...