Whip Inflation Now

March 22, 2021

–Turkey’s Erdogan sacked the head of the Central Bank Naci Agbal, because rates were too high.  Here come capital controls.  –Interesting video from 1978 featuring Jimmy Carter’s plan to stop inflation (I believe it was posted by Eric Peters of One River Asset Mgmt).  It’s all about gov’t austerity: “The gov’t has been spending too great a portion of what the nation produces.”  

–Contrasts couldn’t be sharper today.  The US has the central banker Turkey would love…low rates forever.  The US gov’t is spending as much and as fast as it can.

Jimmy Carter-Anti-Inflation Program Speech (October 24, 1978)President Carter defines what America needs and what he plans to do in order to stop the progress of inflation.www.youtube.com

–WIN, an acronym for Whip Inflation Now! was started by Gerald Ford in 1974.  In 1978 it was still Carter’s number one problem.  Not always transitory.

–Friday featured new curve highs with 2/10 at 158 bps and red/gold pack spread 177.  Back end of the dollar curve was especially weak with blues and golds (4th and 5th years) down 5 to 5.5 bps even as tens closed close to unchanged.  Peak one-year calendar is EDM23/EDM24 at 76.5 bps, up 6.5 on the week.  EDU1/EDZ1 made a new high Friday at 7.5, even as EDZ1/EDH2 remains pinned to its recent low at negative 4.  The market is already concerned about year-end pressure, which may have negative connotations for credit in general.–Treasury auctions twos, fives and sevens this week.  Powell speaks today, and appears with Yellen in front of the House tomorrow.

Posted on March 22, 2021 at 5:26 am by alexmanzara · Permalink
In: Eurodollar Options

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