Re: Inflation/Oil/Gold/Yield Curves - Revisiting Bear Steepening, Recency Bias & That 70's Show.
"Loss of Faith" narratives abound with respect to the UST and USD with the recent Bear Steepening. I argue that this was entirely predictable and driven by Macro/Cyclical factors.
Revisiting Bear Steepening
In June, 2022, I wrote a thread that proposed an “out-of-the-box” solution to the Fed’s dilemma of how to cure Inflation without potentially also creating a Credit Crisis. In short, I said that the Fed and Treasury needed to work together to engineer a Bear Steepener:
Re: Inflation-The Case for Bear Steepening/Why The Fed Won’t Pivot Soon.
I have written several Musings in the past several months on this theme and have collated them here in an ad hoc thread: This thread attempts to structure the argument more cogently and explain why I think a Bear Steepener might be the Fed/Tsy’s best hope of engineering a “Controlled Demolition” of asset prices WITHOUT engineering a CREDIT CRISIS.
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