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The U.S. short term interest rate curve is under increasing stress. In the chart below you can see the difference between SOFR, the rate at which banks lend to each other, and Fed funds, the rate at which the Fed lends money. In a normal market, the difference between both rate should be close to zero. In a stressed one, banks start to express their doubts of being repaid on their loans to other banks by demanding a higher rate. Why is this happening now? After First Brands b

The inflation report for the month of September should have been published yesterday. Due to the government shutdown it will be published at the end of d of the month (scheduled for October 24th) just in time for the FOMC meeting. Tomorrow we should have the unemployment rate, with an expected 4.3% for September. As per the last speech by Jerome Powell, even though inflation is not where the Fed wants it, the unemployment is now the most important indicator to influence monet

Federal Reserve Chair Jerome H. Powell delivered his keynote address, titled “Understanding the Fed’s Balance Sheet,” at the 67th Annual Meeting of the National Association for Business Economics (NABE) in Philadelphia. This was his final public remarks before the Fed’s October 28-29 policy meeting. The takeaways were: (1) The outlook for employment and inflation “has not changed much” since the September meeting. Powell signaled the committee is positioned for two more quart

Gold continues to make new all time highs, questioning the foundations of the fiat currency system. But it also poses a challenge for investors, that for the last 50+ years, did not have to worry about the currency in which they express the returns they achieve. In the current investment environment is not enough to obtain good nominal returns; it’s imperative to obtain positive real returns. Traditionally, real returns are simply calculated by subtracting inflation, typicall

The Chinese trade balance for the long of September was published yesterday. Both exports and imports were up more than expected. Exports increased 8.3%, even after a 27% decline in exports to the U.S., which marks the sixth month of double digit declines. This is showing how resilient and resourceful China is when it comes to trade. Imports went up 7.4% vs an anticipated 1.5%, which tells us our understanding of Chinese tarde mechanics is still very low. But pressure keeps m

The shakeout of markets on Friday was the result of decades of accumulated decisions made by China and the U.S. In 1979 China decided it...

The market ended the week on a sour note. Trump announced what seems to be a temporary break on the negotiations with China, questioning...

Gold has reached $4000 and silver is trading at $50. Their performance YTD is 50% and 66% respectively. The explanation can be found in...

The AI revolution is indeed shocking the world in several dimensions. Despite being in the early stages of practical applications, the...

Gold just broke through the $4,000 mark which is not a good sign. It has doubled in price over the last 19 months and It is telling us...

2025 continues to be a year marked with change. While the U.S. stock market took a hit in April with the tariffs imposed by the Trump...

Yesterday, Japan’s ruling Liberal Democratic Party (LDP) held an internal leadership election following the resignation of Prime Minister...

Historically, October is a volatile month for markets. It is in fact the most volatile month of the year. But as of today, both the VIX...

The S&P500 reached a new high yesterday although it gave back some of those gains before the end of the session and the week. It’s now...

After two days of government closure, the White House and Congress are negotiating when and how to end it, with bargaining on both ends...

With just 3 months until the end of the year, it’s interesting to see the performance scorecard of different asset classes as of the end...

We are witnessing the development of major conflicts in the world as clearly delineated by Ray Dalio in the chart below. The trade war,...

The price of Gold keeps making new highs expressed in every currency, included the dollar, of course. US gold reserves, supposedly the...

The credit market is starting to get interesting. First, tech companies are tapping the bond market to finance their aggressive CapEx...

As of today, the U.S. government has not reached an agreement to avert a potential shutdown. The current fiscal year ends on September...