Wild week. And it is not over.
Two things I am watching.

Source: Fred

Source: CEFConnect.com
Wild week. And it is not over.
Two things I am watching.
Source: Fred
Source: CEFConnect.com
Wow. Stunning collapse in short duration yields.
Source: Marketwatch.com
Over 100 bps on the two year.
And what is even more interesting to me is the gap between the current Fed Funds target rate and these rates:
Source: Bloomberg.com
Seems like that is going to need to resolve itself somehow, at some point.
Despite the Fed raising interest rates, credit conditions were actually relaxing on some levels in the back half of 2022.
“Financial conditions have loosened significantly in recent months and, by some measures, are around levels that prevailed last March when the Fed initiated this hiking cycle.” – Why the Federal Reserve Should Raise Rates by Half a Percent
Equities were rallying through this period, unsurprisingly. So, were digital bit apes and other assorted things.
However, there appears to be evidence that credit conditions are now heading the other way:
We have had a 15 year bull market with low interest rates and lots of liquidity. In other words, “Disneyland.”
My sense is most market participants are going to be slow to change how they learned to behave during the bull market cycle, until they are forced to do so.
Influential Reads – February 2023
“Standards apply not just to the quality of work you produce but the opportunities you work on. If you accept substandard work from yourself, you’ll only get average work from others. If you say yes to average projects, you’ll have no time for exceptional ones.” – Brain Food, Farnam Street
Big news in my world: I resigned my CFO role at a private equity backed software maker after selling the business to a new private equity group. I will be taking some time off to “to evaluate, to collect, to dream, to wonder and to wander.”
Reading and writing more is definitely a goal.
Here are my most influential reads for the month – in no particular order:
Note: This is based on when I read the article, not necessarily when it was first published. Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.
Top clicks across the site last month:
Updated stats:
Read Articles | Books | |
January | 80 | 0 |
February | 62 | 2 |
March | ||
April | ||
May | ||
June | ||
July | ||
August | ||
September | ||
October | ||
November | ||
December | ||
Total | 142 | 2 |