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Fiscal And Furious 💸
Did you know that in 2009, Sweden’s central bank, the Riksbank, was the first to use negative interest rates, essentially charging banks to hold their money in an effort to encourage lending and boost inflation?
Equity Eats
March 01, 2024
Fiscal And Furious 💸
Did you know that in 2009, Sweden’s central bank, the Riksbank, was the first to use negative interest rates, essentially charging banks to hold their money in an effort to encourage lending and boost inflation?
This highlights the fact that when it comes to monetary policy, some institutions are perfectly willing to go further than any have gone before in order to control the market.
In this newsletter, we offer concise insights into the following topics:
What’s The Right Range For US 10-year Treasury Yields: First, we break down the future trajectory of US 10-year Treasury yields, essential for understanding potential economic shifts in 2024 🤔
No One Wants Ukraine To Win: Next, we tackle the divided U.S. approach to Ukraine, potentially presenting an opportunity for our enemies to gain an upper hand ❌
Where Is US Deterrence: Finally, we examine the impact of Houthi attacks on global shipping, which calls for robust deterrence strategies in protecting international trade routes 🔍
Through these articles, we aim to bridge the gap between economic indicators and their geopolitical implications, offering our readers a streamlined yet deeper perspective on current global affairs.
What’s The Right Range For US 10-year Treasury Yields? 🤔
Generally, over the long run, 10-year yield tends to equal the real rate of GDP growth plus inflation.
So assuming that real GDP growth averages about 1.5% per year over the long run and inflation averages 2% per year, that would put the long-run 10-year yield at about 3.5%.
However, in 2024, GDP growth will probably run somewhat above 2%, and the 10-year yield should range between 3.5% and 4.25% 📈
Currently, yields are at the upper end of the range, which suggests that yields are likely to head somewhat lower over the balance of the year 📉
No One Wants Ukraine To Win ❌
The dominant narrative today holds that Biden and Trump are opposites on Ukraine.
The president supports the Senate bill that includes about $60 billion for Kyiv, mostly in military aid.
The former president attacks it, and his influence among House Republicans is why Speaker Mike Johnson is reluctant to bring it to the floor for a vote.
But when it comes to the failure to spell out a strategic argument, the two are no different 😵
As a result, the military-aid package has largely been fought over issues unrelated to Ukraine, such as funding for border security.
Meanwhile, Democrats sound like hawks, Republicans sound like doves, and U.S. policy slides into strategic incoherence.
The enemies of the United States are salivating 😈
As Lenin, the architect of Soviet communism, used to say, “when there is mush, we push.”
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Where Is US Deterrence?🔍
Houthi attacks have put a chill in global shipping with ongoing economic shock waves spreading across the globe.
The volume of traffic from North American and European vessels transiting the Red Sea was down by 67% in February compared with October 2023 📉
Some experts suggest that the best way to end the Houthi attacks is by forcing Israel to end the war on Hamas ✡️
That’s like saying the best way to stop the bully on the playground from beating up everyone on the playground is to make him king.
When will the experts learn that appeasement only brings more aggression from our enemies? ⚔️
