by Karl Denninger
Market-Ticker.org
Expecting more rate cuts?
Well, now both the CPI and employment report say you’re nuts.
Now the markets say yes — and in fact they already have with the IRX (13 week bill) trading at 4.53% right now. So in point of fact the markets, which always drive rates (not The Fed), are indeed trading below Fed Funds.
Worse, the TNX, the 10 year, is still trading at 4.1% this morning meaning the 13/10 year is still deeply inverted.
Now add into this not one but two serious storms and the damage they have caused — which of course will spike demand for all manner of things. Have we forgotten the most-basic economic equation, MV = PQ?