The Fed Is Doing What It’s Been Told It is fulfilling the terms of its mandate not wisely, but too well.

Opinion | @johnauthers.bsky.social , Columnist

The Fed Is Doing What It’s Been Told

It is fulfilling the terms of its mandate not wisely, but too well.
www.bloomberg.com/opinion/arti... via @opinion.bloomberg.com

After the appalling news about Charlie Kirk, it's worth rereading Alistair Cook's great reportage from the scene of RFK's assassination in 1968. The parallels are close, and Cook's wisdom still relevant:
www.bbc.co.uk/programmes/a...

All That Glitters Is Cognitive Dissonance The gold rally has legs. But it’s relationship with equities is gaining a lot of attention.

Opinion Newsletter | @johnauthers.bsky.social & Richard Abbey, Columnists

All That Glitters Is Cognitive Dissonance

The gold rally has legs. But it’s relationship with equities is gaining a lot of attention.
www.bloomberg.com/opinion/news... via @opinion.bloomberg.com

“.. the deflationary slump seems to be over. The bad news is that inflation is back. Core Japanese inflation.. is now higher than in the US for the first time in 48 years ..

“.. Could this cause problems for the rest of the world? Yes, it very much could.”

@johnauthers.bsky.social

I've no idea how to access that. Just send it to my own email. (Jauthers@bloomberg.net)

By which I meant explain. Doesn't really help any one to say I'm wrong unless you explain why.

Explsin.

Who Lost Europe? Hint: It’s Not Trump’s Fault The mistakes have been decades in the making.

Brilliant @bloomberg.com piece by @johnauthers.bsky.social on "who lost Europe." The EU has kicked the can for far too long on everything from massive debt overhangs in Italy and Spain to Russia sanctions. Deep reforms and debt write-downs are needed to fix the EU.
www.bloomberg.com/opinion/arti...

Who Lost Europe? Hint: It’s Not Trump’s Fault The mistakes have been decades in the making.

Opinion | @johnauthers.bsky.social , Columnist

Who Lost Europe? Hint: It’s Not Trump’s Fault

The mistakes have been decades in the making.
www.bloomberg.com/opinion/arti... via @opinion.bloomberg.com

There's a new front in the Battle for the Fed:
www.bloomberg.com/opinion/news...

Powell’s Last Stand at Jackson Hole The Fed chair may have the high ground, but so did Custer.

Powell faces his Last Stand at Jackson Hole: www.bloomberg.com/opinion/news...

AI Is Holding Up the Sky. The Rest Fell Back to Earth The average stock’s outperformance has returned to 2003.

Latest Points of Return: www.bloomberg.com/opinion/news...

Stock warning on magnificent 7

@johnauthers.bsky.social on BBG with a reminder or two.
www.bloomberg.com/opinion/news...

Whatever the Alaska Game Was, the Odds Didn’t Move Betting markets were unfazed by the Trump-Putin summit. It’s Europe and Ukraine’s turn.

Opinion Newsletter | @johnauthers.bsky.social , Columnist

Whatever the Alaska Game Was, the Odds Didn’t Move

Betting markets were unfazed by the Trump-Putin summit. It’s Europe and Ukraine’s turn.
www.bloomberg.com/opinion/news... @opinion.bloomberg.com

It Looks Like a Trump-Putin-Xi World, But It's Really Orwell's How the Alaska summit reflects the superpower carve-up foretold in ‘1984.’

The world seems to be heading for a version of Orwell's Oceania, Eurasia and Eastasia from 1984:
www.bloomberg.com/opinion/arti...

Where Is Bessent Pulling These Rate Models From? They fly in the face of decades of rules and experience.

Opinion Newsletter | @johnauthers.bsky.social, Columnist

Where Is Bessent Pulling These Rate Models From?

They fly in the face of decades of rules and experience.
www.bloomberg.com/opinion/news... via @opinion.bloomberg.com

In fact Taylor rule (the most used model that uses target inflation vs current, real interest rate and the resource unemployment gap) states rates should be higher 1% @johnauthers.bsky.social notes (Mankiw’ even more). Plus, long end bonds don’t care about FED rate (it’s the Greenspan conundrum)

“.. Where is Bessent pulling these rate models from? .. suggesting that [effective Fed funds] should be about 2.6%. Over the last 70 years, the rate has never been that low with inflation as high as it currently” is.

@johnauthers.bsky.social
www.bloomberg.com/opinion/news...

Tariff Derangement Syndrome Is Meeting Reality The links between inflation, a rate cut, and a record for stocks aren’t what they seem.

Of 75 items within core goods CPI, “65.3% rose in July, up from 57.3% in June .. the highest in 30 months.”

@johnauthers.bsky.social
www.bloomberg.com/opinion/news...

Nationalism Goes Better on Chips Than Nothing Markets view the US taking 15% of Nvidia’s sales to China as part of the deal.

Opinion Newsletter | @johnauthers.bsky.social , Columnist

Nationalism Goes Better on Chips Than Nothing

Markets view the US taking 15% of Nvidia’s sales to China as part of the deal.
www.bloomberg.com/opinion/news... via @opinion.bloomberg.com

Godfather of the Mar-a-Lago Accord Goes to the Fed Miran’s call to shake up the central bank is as breathtaking as it was for world trade.

Opinion Newsletter
@johnauthers.bsky.social , Columnist
Godfather of the Mar-a-Lago Accord Goes to the Fed

Miran’s call to shake up the central bank is as breathtaking as it was for world trade.
www.bloomberg.com/opinion/news... via @bloomberg.com

US banks now trade above pre-GFC valuations 📈

They also sit at a huge premium to book value vs global peers.

Would you buy a financial stock well above book?

Quality premium… or bubble risk?

Chart:
@johnauthers.bsky.social

The Revision Heard ’Round the World The quality of jobs statistics was already a problem before Trump drew attention to it.

Gift Link / Free to Read

Opinion | @johnauthers.bsky.social , Columnist

The Revision Heard ’Round the World

The quality of jobs statistics was already a problem before Trump drew attention to it.
www.bloomberg.com/opinion/arti... via @opinion.bloomberg.com

Hyperscaler AI capex has been “phenomenal” — but most of it “is to buy AI chips from Nvidia.”

“.. Investment in tech-related construction (for data centers and so on)” has actually declined slightly in the last few months.

@johnauthers.bsky.social
www.bloomberg.com/opinion/news...

Since April, back to the old playbook.

Via @johnauthers.bsky.social.

‘Investment in tech-related construction (for data centers and so on) has declined slightly in the last few months.’ www.bloomberg.com/opinion/news... via @peterberezin.bsky.social @johnauthers.bsky.social

Bananafication Is the New Exceptionalism The critical variable to limit the damage may be Trump’s shift on defense policy.

‘If the rest of the world has a strategy (as opposed to a lack of will for the fight), it is to give Trump what he wants in return for retaining his military support, and wait for protectionism to blow up in his face.’ www.bloomberg.com/opinion/news... by @johnauthers.bsky.social

Job Description — Find Better Numbers, or Else Shooting the messenger further threatens US centrality to the world economy.

Free to Read / Gift Link

Opinion Newsletter | @johnauthers.bsky.social , Columnist
Job Description — Find Better Numbers, or Else

Shooting the messenger further threatens US centrality to the world economy.
www.bloomberg.com/opinion/news... via @opinion.bloomberg.com

How seriously should you take Trump's firing of the head of the BLS?

@johnauthers.bsky.social says this further threatens US centrality to the world economy 🎥

AUTHERS: “.. Companies got out of the habit of responding to government surveys in 2020 when the pandemic gave them more important things to do, and it’s proved habit-forming. .. so it’s not surprising that the numbers need revisions.”

@johnauthers.bsky.social
www.bloomberg.com/opinion/news...