Monetary policy

The Gove's bond yields also remained broadly unchanged from the previous week.

On one hand, the investor benefited from the greater clarity provided by the Fed policy guidance, But on the other hand, the yields continue to be influenced by inflationary pressures, stemming from the higher oil prices.

The yield on the 10-year US Treasury remained around 5%, while the 10-year bond miscalculated close to 3.5%.

During the week, the Federal Reserve met market expectations by announcing a 25 basis bond increase in the rates.

The entire world of forward guidance and growing the balance sheet really was an attempt to have the Fed manipulate the economy in ways that it never really had before.

Kevin Walsh is actually trying to move us away from the world in which the Fed is – is all anybody pays attention to, right? New economic news comes out and all anybody wants to know is what does this mean for Fed policy? And I do think that he is moving towards a world where the Fed is not trying to do a kind of form of price control, you know, where they have a particular measure of inflation and that's the one, you know, he's sticking with that for now.

But I think he wants to move to the world that Steve was actually just talking about, which is one of dollar stability.

When they say price stability, right, that's the statutory goal.

So I'm not saying they're not an issue.

The high prices themselves are the result of bad monetary policy and overspending by the government where it's it's affecting what should be free markets.

Yeah, if those who are decrying affordability, which is a real concern, I don't diminish that, but if they were really serious about affordability, they'd be denouncing Congress for spending too much and denouncing the Fed for monetizing a lot of federal spending.

But they're not interested in that.

Sometimes you don't know what else to do, but just shake your head.

You talked a little bit about what the Constitution says in terms of money, that states had to, if they had money, if they were circulating, it had to be gold or silver.

What else does the Constitution say about money? And how did Alexander Hamilton influence our country's monetary policy?

Maybe, unfortunately, the Constitution didn't go into much additional detail.

So where do you think all of this is headed?

You know, the idea that Fed policy right now is not restrictive, um, whi- which seems to be the consensus, is ludicrous when you consider the fact that small business bankruptcies are up 64% year over year.

We've seen more than 200 companies closing every single month now for five months running.

September's on that same exact run rate.

For the 10-year, the 10-year yield, um, embodies all the rate hikes that are expected over the next year or two within that 10, 10-year timeframe.

So the 10-year, the 10-year yield is more, um, sensitive to Fed policy, uh, in, in a sense that if the Fed hikes and indicates that further hikes are in the pipeline, then the 10-year yield may well stay elevated.

If we look at short-term rates across the UK, the Eurozone, and the US, what I'm showing here is September 2027 three-month futures, the spread between next year's three-month futures and the current three-month rates.

So the three-month rates at present already have some hiking embedded in them.