Macro Insights/Report: Long Bonds Update
Personal income and outlays data
We just had the personal income and outlays come out in line with expectations. Headline PCE remained flat and Core PCE decelerated:
The deceleration in core PCE is exactly what we want to see for the long bonds view I shared (link). If you want to break down this data more, I provided a full Excel model of this dataset in this article:
THE Model for taking bets in markets (and life)
If you are new to the Substack welcome to the journey. We are moving fast but I promise no one will be left behind. You are going to want to read this article to the end because I will be sharing THE Model for taking bets in markets and life. Social media will throw heuristics at you but never actually break down the principle for taking bets. Rarely d…
We are closing the week with the March FED Funds contract pricing a toss-up between a cut or pause. We have seen some marginal hedging in equities as traders prepare for next week.
While the March contract might be causing a short-term pullback, bonds remain skewed to the upside on a cyclical basis. Equities remained skewed to the upside as well. I did a short presentation on equities that I posted on Twitter:
Main idea: No change in views. Bonds and equities are skewed to the upside on a cyclical basis. I will be writing a report comprehensively breaking down inflation and HOW market expectations directly connect with the current inflation picture. This will be the key factor that the FED is watching for their decisions. Stay on the lookout for that article!
AI Art of the day:
