U.S. Yield Curve Flattens as Traders Mull Half-Point March Hike (Fed's March Of The Toreadors Killing The Bull Market)

Confounded Interest ^ | 01/31/2022 | Anthony B. Sanders

[Browns Ultra Fan]

Raphael Bostic and Goldman Sachs are both calling for dramatic rate increases to fight inflation … that they helped cause with their monetary stimulypto. I call this The Fed’s March of the Toreadors as The Fed now attempts to kill the bull market.

(Bloomberg) — The Treasury yield curve flattened to the lowest level in over a year on Monday as the prospect of a super-sized Federal Reserve rate increase in March gained traction, weighing disproportionately on shorter-dated tenors.

Two-year U.S. yields climbed as much as 4 basis points after Raphael Bostic, the president of the Fed’s Atlanta branch, said the U.S. central bank could raise its benchmark rate by 50 basis points if a more aggressive approach to taming inflation is needed.

Traders are currently betting the Fed will deliver 32 basis points of tightening in March, more than fully pricing an increase of a quarter-point. That puts the implied probability of a 50-basis-point increase at almost 30%. The odds of such a move in December were zero.

Consumer prices rose an annual 7% in December, the fastest pace in almost four decades. Powell left the door open to increasing rates at every meeting, and didn’t rule out the possibility of a 50-basis-point hike.

In an interview with the Financial Times, Bostic stuck to his call for three quarter-point interest rate increases in 2022, while saying that a more aggressive approach was possible if warranted by the economic data. Bostic is a non-voting member of the FOMC this year.

To be clear, Bostic and others are trying to signal The Fed’s intent well in advance to avoid a surprise knock-down of the stock market. Or a killing of the bull market.

Here is a video of Raphael Bostic leading The Fed Toreadors in the slaying of the bull market.

[Browns Ultra Fan]

The Fed kept monetary stimulus on full blast since the financial crisis. Now that want to raise rates as the economy tanks? What kind of idiots are runnuing The Fed? Yup, they are DC politicians. Or FOLITICIANS.

[JoSixChip]

They should have been raising rates back in January when the housing market blew-up. The market is way, way overpriced. A 60% correction, for starters, might bring it in line with actual values. Inflation is the killer, it should be brought down under 3% at any cost.

[glorgau]

3/4 of a point over a year is going to stamp out 7% inflation. Not.

[Don Corleone]

Once the Marxists start they have no choice but to continue to eff up whatever they attempt. They can’t do it any other way. Its Marxism’s Achilles heel,

[SaxxonWoods]

Scream when the FED raises.
Scream when FED lowers.
Scream when the FED stands pat.

The road to riches.

[Jay W]

“U.S. Yield Curve Flattens as ...”

So, the Curve has finally flattened after all..... ;-)

[SaxxonWoods]

Blaming the FED for 50 years of govt overspending is like blaming your mechanic because a vandal put sugar in your gas tank.