Free Republic

A strange narrative of “defeated inflation” is circulating in the mainstream in the wake of the Federal Reserve’s recent 75bps interest rate hike, but we’ve seen this kind of false optimism from the Fed and the media before. Economists calling for a deflationary reaction might be holding their breath for a while as price inflation continues to climb for many months to come. This consequence is reinforced by the decline in foreign investment in US Treasury bonds. Higher interest rates and the promise of increasing yields have not been enough to lure outside investors into treasury markets, with treasuries now...

With Joe Biden's polling numbers in the tank and runaway inflation the number one issue on voters' minds, in steps Biden's Treasury Secretary, and former Chair of the Federal Reserve, to take one for the team.Washington (CNN) US Treasury Secretary Janet Yellen admitted Tuesday that she failed to anticipate how long high inflation would continue to plague American consumers as the Biden administration works to contain a mounting political liability."I think I was wrong then about the path that inflation would take," Yellen told CNN's Wolf Blitzer on "The Situation Room" when asked about her comments from 2021 that inflation...

Another 10 basis point jumps in Treasury yields, this time at the 2-year Treasury Note. The 10Y-2Y Treasury slope just flattened to +26 BPS. Another step in rising mortgage rates! Washington DC is anything but Harmony Hall.

If you’re eyeing ways to fight swelling prices, I bonds, an inflation-protected and nearly risk-free asset, may now be even more appealing.I bonds are paying a 9.62% annual rate through October 2022, the highest yield since being introduced in 1998, the U.S. Department of the Treasury announced Monday.The hike is based on the March consumer price index data, with annual inflation growing by 8.5%, the U.S. Department of Labor reported.

Mortgage applications are going down as expectations of monetary tightening send mortgage rates soaring. Mortgage applications decreased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 1, 2022. The Refinance Index decreased 10 percent from the previous week and was 62 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent lower than the same week one year...

Wasting away again in Biden/Pelosiville, looking for my lost inexpensive gasoline and food. Some people say that Putin is to blame, but we know its Biden/Pelosi’s fault. The US Treasury 10Y-2Y yield curve just inverted, generally a precursor to a recession. Called it, nothing but net! Meanwhile, today’s jobs report shows that Bidenflation is crushing America’s wage growth. While average hourly earnings grew to 5.6% YoY, we are still seeing inflation growing at 7.9% YoY meaning that inflation is reeling hurting the middle class and lower-income households. The good news is that the U-3 unemployment rate fell to 3.6%, almost...

A new report released from the Treasury Inspector General for Tax Administration (TIGTA) showed that the Internal Revenue Service failed to correct issues found in earlier pandemic benefit programs and ended up sending Recovery Rebate Credit payments to deceased or otherwise ineligible individuals in the latest round of aid resulting from the American Rescue Plan. According to the TIGTA's final audit report issued last week, "the IRS issued more than 1.2 million payments totaling $1.9 billion to potentially ineligible individuals," and blamed the improper payments on "deficiencies TIGTA previously reported based on its review of the IRS’s implementation of the...

The U.S. breakeven 10 year (USGGBE10 Index) went above 3% for the first time EVER. Breakeven inflation is the difference between the nominal yield on a fixed-rate investment and the real yield (fixed spread) on an inflation-linked investment of similar maturity and credit quality. Way to go, Joe!

This is the chart from hell as The Fed is expected to take interest rates higher. At least mortgage rates are down slightly today. With 8+ rate hikes forecast over the next twelve months. Meaning that Powell’s Fed money gun is going to slow.

Oil prices are soaring as US President Biden pleads like a homeless person to foreign countries for oil rather than let the US produce more oil to drive down prices. Meanwhile, the US Treasury yield curve 10Y-3M is at its steepest (rising 10Y yields while The Fed keeps short rates at near zero). But if we look at the belly of the beast, so to speak, the 10Y-5Y slope, we can see that the Treasury curve has declined to a mere 0.278 basis points as inflation rages. Bankrate’s 30-year mortgage rate keeps on climbing and has hit 4.55% as the...

Treasury Secretary Janet Yellen on Thursday sanctioned a host of Russian-backed news outlets for allegedly "advancing false narratives" and spreading "false information" to "undermine COVID-19 vaccines" and paint "Ukrainian government officials as the aggressor in the Russia-Ukraine relationship."Yellen's sanctions hit the Strategic Culture Foundation, Odna Rodyna, Rhythm of Eurasia, Journal Kamerton, InfoRos, SouthFront, United World International, New Eastern Outlook, Oriental Review and Geopolitica.Yellen provided no evidence or specific examples of any "false information" the various websites allegedly spread to "undermine COVID-19 vaccines" in her press release announcing the sanctions. The sanctions freeze the websites' assets and ban Americans from donating...

I thought the last inflation report of 7.5% inflation was bad. But then the Atlanta Fed updated their inflation measure for flexible prices. Flexible inflation, less food and energy, is roaring at 19% YoY! Flexible prices are those prices that adjust rapidly. Speaking of rapid rises, take a look at the 2-year US Treasury yield since COVID struck in early 2020. We did see 2-year Treasury yields generally correlated with The Fed Funds Target Rate … at least until COVID struck. Since mid-2020, The Fed Funds Target Rate remains at 0.25% while the 2-year Treasury yield is roaring back with...

Treasury Secretary Janet Yellen is having trouble with the curve (yield curve, that is). It keeps inching up, meaning that Treasury’s cost of debt financing is inching up too. As Treasury yields keep rising, so does the problem of financing the massive Federal debt load. Here is a chart showing the interest outlays in the Federal budget against the cost of Federal funding at the 10-year and 2-year tenors. Now, The Fed is predicted to raise their target rate 4 times in 2022 (according to Fed Funds Futures data) and it looks like a whopping 100 basis points (or 1%)....

Happy New Year! And Treasuries are off to fast start with investors bailing on Treasuries and buying stocks. AND the expectation that The Fed will raise rates 3 times this year. The 10-year Treasury Note yield rose above 1.60% this morning. And the US Treasury 10Y-2Y curve rose to 80.601 basis points. Fed Funds Futures data is showing 3 rates hikes in 2022. May, September and December. The Fed Dots project is definitely showing an upward trend in the Fed Funds Target rate with FOMC member forecasting the median target rate to be above 2% by 2024. Of course, Fed...

In a letter to both Yellen and President Biden, the group of lawmakers said that failure to relax international restrictions on Afghanistan’s banking system risks creating “economic pain and humanitarian collapse,” as fears mount that a crumbling economy will spur a new refugee and hunger crisis. The Biden administration in August froze the majority of the Afghan central government’s $9.4 billion in assets — most of which is held in U.S. bank accounts — after the Taliban took control of Kabul and the country. The Biden administration has said recognition, and release of funds, will not come until the Taliban...

NEWS: The initial interest rate on new Series I savings bonds is 7.12 percent. You can buy I bonds at that rate through April 2022.

The Dream Team (Fed Chair Jay Powell and Treasury Secretary Janet Yellen) just can’t believe that inflation struck even after M1 Money Stock increased by 369% from March 2020 to today while interest rates remained near zero. From The Hill: Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen on Wednesday said they underestimated how quickly the U.S. economy would rebound from the COVID-19 recession and strain supply chains. During a Wednesday hearing before the House Financial Services Committee, the top two U.S. economic policymakers acknowledged that high inflation has risen higher and lingered much longer than they expected....

Facing insurmountable odds against Office of the Comptroller of the Currency nominee Saule Omarova in the U.S. Senate, the Biden administration accepted the withdrawal letter from the embattled nominee on Tuesday.The President characterized the abandonment of the nomination as “… unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale.”But members of the Senate Banking Committee on both sides of the aisle had grown increasingly uncomfortable with Omarova’s past policy stances on how banks should be organized and regulated; including, supporting radical proposals that would “change banking as we...

The radicals who tell Joe Biden what to do as president overreached when they had him nominate Saule Omarova as comptroller of the currency, a powerful regulator of the banking system. The émigré from Soviet-era Kazakhstan, a Lenin Scholar at Moscow State University, earned a credential as a Ph.D. from the University of Wisconsin, while also earning the credential of thief for an arrest for shoplifting in Madison, demonstrating contempt for private property. Naturally, she ended up as a professor. That contempt, along with a Soviet commissar's view of private enterprise, when she expressed a desire to starve oil and...

President Joe Biden’s choice to be comptroller of the currency at the Treasury Department, Saule Omarova, apparently joined a Facebook group in 2019 called “Marxist Analysis and Policy.” Fox News reported that in late October, the American Accountability Foundation uncovered a post from 2019 in which a member of the Marxist page posted, “Let’s welcome our newest members: Saule Omarova.” The post connects to a Facebook account that appears to have a profile picture of the Biden nominee. The profile picture has 85 public likes and 14 public comments, which are apparently from people close to Omarova, including a University...