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Anonymous ID: fb96b9 Oct. 3, 2022, 4:29 p.m. No.17627271   🗄️.is đź”—kun

A Dog's Life

Easy money for international harmony: This afternoon, the United Nations issued a statement criticizing the Federal Reserve and other central banks for their policy tightening campaigns, arguing that the Third World is ill prepared for the consequences of benchmark interest rates well above zero across the West. “There’s still time to step back from the edge of recession,” Rebecca Grynspan, secretary general of the U.N.’s Conference on Trade and Development, said in a statement. “We have the tools to calm inflation and support all vulnerable groups. But the current course of action is hurting the most vulnerable, especially in developing countries.”

 

Data from today suggest that the diplomat bureaucrats may have a point. JPMorgan’s in-house global manufacturing index decelerated for a fourth straight month in September, to 49.8, the gauge’s first reading south of the 50 mark delineating expansion from contraction since June 2020. Similarly, the Institute for Supply Management’s September PMI slumped to 50.9, the weakest reading since May of that plague year, while the new orders component languished at 47.1, territory that had only been breached on the downside four times over the past decade, including three straight readings during the spring of 2020.

 

Interest rate futures are beginning to discount the potential of a turning tide, now pricing in a 4.14% funds rate by the end of next year, down from 4.5% one week ago.

 

Meanwhile, Bianco Research notes that the 10-year note wrapped up Friday’s trading with its ninth consecutive weekly price decline, settling at 3.83% yield compared to 2.67% at the end of July. That’s the longest such losing streak such streak in 28 years and only the fourth such instance of uninterrupted losses since September 1981, a month that marked the climax of a 35-year bear market in bonds.

 

Might pockets of relative value finally be presenting themselves in the Treasury complex? See the analysis “Biography of a dog” in the current edition of Grant’s Interest Rate Observer dated Sept. 30 for more.