New Deal democrat Weekly Indicators January 6-10 2025
– by New Deal democrat
My “Weekly Indicators” post is up at Seeking Alpha.
The big changes this week were the sharp increases in long term interest rates, along with similarly sharp increases in commodity prices and the US$. Some of this is due to a feeling that the economy is running “hotter” than recently thought, and frankly a lot is almost certainly due to the belief that the policies of the incoming T—-p Administration are likely to create lots of international friction and inflationary money-printing.
As usual, clicking over and reading will bring you up to the virtual moment as to the state of the economy, and reward me a little bit for categorizing and organizing it all for you.
Year-end Weekly Indicators at Seeking Alpha – Angry Bear by New Deal democrat
The Fed has reduced its balance sheet over the last 2 years by $3 trillion to reverse QE. That means the Fed has dumped almost that much back into the private sector (some of it is maturing bonds and other Fed functions like repos). Bond yields move in the opposite direction as price. So if the supply of bonds have increased by that much the price is sure to go down; hence higher yields (interest rates on long bonds). The Treasury use to pay the interest on those bonds to the Fed which turned around and gave it back to the Treasury. Now those interest payments are going to the private sector. This is the same thing as stimulus payments to the private sector which supports economic activity.
I am not sure what you mean by “printing money”. In our fiat money system all federal government spending is technically money creation from the private sectors point of view. Deficit spending is financial wealth creation.
Mark:
I am not so sure, NDd is discussing printing money. To brief for me to assume such.
Bill,
What do you interpret “printing money” to mean?
Mark:
That is for you to answer . . .