Comments on: Powell To Pivot (Again) Soon, $USD & Treasuries In Focus

By: BBROWNBEBE

BBROWNBEBE — Sat, 24 Sep 2022 03:57:47 +0000

There are some conceivable scenarios that might cause a sudden crisis for the dollar. The most realistic is the dual-threat of high inflation and high debt, a scenario in which rising consumer prices force the Fed to sharply raise interest rates. -investopedia… both of which are happening yet $DX continues it’s parabolic move ???

By: budgetny

budgetny — Fri, 23 Sep 2022 16:59:00 +0000

Thank you for all the timely trade ideas and updates. I believe Powell may be upset with the administration. They have put inflation and fault squarely on his shoulders saying he must do something. Meanwhile the administration chokes the supply of energy, does a trillion dollar loan forgiveness program and prints another trillion with the inflation protection act. As the responsibility for fighting inflation has been put on him, I don’t see him backing off. If inflation continues, its on him and they aren’t giving him any help. I think he will continue the tough talk.

By: rsotc

rsotc — Fri, 23 Sep 2022 13:11:20 +0000

In reply to rsotc. BTW- The Fed doesn't HAVE to publicly announce they are supporting the Treasury market, at least I don't believe they do, or at least, not right away (maybe it gets disclosed later). As I said, this near-vertical ascent in both Treasuries & the $USD is unsustainable & poses a significant & increasing (as long as it continues) risk to the global financial system.

By: rsotc

rsotc — Fri, 23 Sep 2022 13:05:17 +0000

In reply to Mikeflegel. I think everyone knows the Fed has absolutely no idea what they are doing, at least the smart money (professional/institutional traders). If nothing else, should my hunches prove correct & the Fed makes even the slightest hint of back peddling, ESPECIALLY so close to this week's FOMC meeting, where Powell made it extremely clear that he was unwaveringly hawkish & wasn't even considering slowing down the rate of QT, that would be a massive blow of confidence in the Fed & a net bearish event for the stock market, although bearish after a likely initial knee-jerk bullish (stock market rally) reaction that will subsequently get faded. Quite the prediction with lots of moving parts so take it FWIW. Just throwing out what I think is a potential & somewhat likely scenario & how to trade it, should it materialize.

By: Mikeflegel

Mikeflegel — Fri, 23 Sep 2022 12:52:47 +0000

Thanks for an update Randy… Longer term wouldn’t a pivot show the market that they have lost control???

By: rsotc

rsotc — Fri, 23 Sep 2022 12:44:42 +0000

I should have clarified that I don’t expect an immediate change/cut in the Federal Funds rate, rather more likely something along the lines of a “temporary” pause or reducing in quantitative tightening (reducing the Fed’s balance sheet/bond holdings).