Unsurprisingly, @LukeGromen identified the duration problems and unrealized losses in the banking system in recent months more accurately than most.
The best macro call I saw in 2019 was Luke highlighting the liquidity problems that were building, which ultimately resulted in the September 2019 repo spike.
This March 2023 event was a similar dynamic at play, but worse.
Reduce monetary base = things break.
This March 2023 event was a similar dynamic at play, but worse.
Reduce monetary base = things break.
Rapidly printing money is basically a "breach of contract" for existing savers.
Similarly, rapidly destroying money is basically a "breach of contract" for existing debtors.
The current Fed uses the monetary base like a yoyo, up and down. Very active and generally in a rush.
Similarly, rapidly destroying money is basically a "breach of contract" for existing debtors.
The current Fed uses the monetary base like a yoyo, up and down. Very active and generally in a rush.
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