7 Comments
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ali hobballah's avatar

Absolute pleasure to read.. i find myself going over it again and again.. When you refer to owning cash cash, are you referring to going long very short paper, one year maturity ? US-1-YEAR rates@ 3.9% ?Also, can one reconcile a core CPI north of 6, and US inflation expectations for the one year period of 2.2%?

Florian Kronawitter's avatar

Thank you! Yes and yes. 6pc is over last year, 2.2 would be over past year one year from now

Rkumar's avatar

Beautiful analysis.

Question: why do you think treasury liquidity is going to be an issue given reverse repo and Fed swap lines?

bm14's avatar

Fantastic summary mate. About print this off for my girlfriend to read.

Timing the pivot will be tough, good luck to us all

mendo's avatar

But how to know when the FED pivot will really happen?

Andrés's avatar

Great substack. Balanced, data driven and well written.

One Question, have you looked at TIPS?

The 5Y is around 1% and I know it should be affected by QE. But its my impression that nominal yields are the ones that need to raise if inflation continue to stay elevated but am not sure about real rates.

THANKS

Florian Kronawitter's avatar

Thanks a lot! Have not looked at TIPS unfort