Trader’s Narrative

Bernanke could have made his Humphrey Hawkins testimony today before Congress simple by showing them this chart:

Ever had a puppy that somehow got away from the leash? You know how every time you approached it to try to reattach the leash, it thought you were playing a game of “chase” and ran away? Well, the […]

The bond market and the stock market are intimately intertwined. But how exactly they influence each other is often complex. The dynamic nature of their relationship makes it even more difficult to read the market’s tea leaves. As soon as you think you’ve figured them out, the interplay among them changes and the game starts […]

Here’s a chart of +50 years of the intended Federal Funds rate:

Now is an appropriate time to take a step back and look at the bigger picture because what the Fed has just done is extremely rare.
It has reduced the interest rate by more than 43% in less than 6 months. To find such a […]

As the Fed Funds futures indicated, we got a 50 basis point cut. And since this was what the market expected and had come to rally for ahead of time, we got a muted response. I wrote early this morning:
“If we do get exactly 50 basis points, we could flail around and end the day […]

Today we’ll be keying off only one market tell: the scheduled Federal Reserve rate cut decision.
I’ve been following a simple model of the Fed’s actions: approximation of the 90 day US government T-Bond yield. At yesterday’s close, the 3 month US Treasury Bond’s yield was 2.280% and in overnight trading they were a bit lower […]