“A lie gets halfway around the world before the truth has a chance to get its pants on.”
Winston Churchill

Key Takeaways

  • I thought that was the worst explanation of a Fed Policy decision since the time he was a rookie on the rate hike job in 2018.
  • UST 10yr Yield ramps to new Cycle Highs = 4.44% after Powell outright lied about inflation's impact on Bond Yields
  • USD/Oil immediate-term correlation = +0.91; Both USD Index and UST 2yr Yields are at new CYCLE HIGHS this morning

The big picture

The reason why unelected central market planners like Ben Bernanke and Jerome Powell can outright lie to The American People is that too many people in power get paid to believe them.

If you have friends who are angry with me for saying these guys lie, I get it. But someone in this profession needs to speak #truth to the establishment’s power. I didn’t build this firm and content platform to pander to anyone’s politics.

If your premise for believing everything Powell says is that he was put on this earth to centrally plan economic gravity, that’s where we disagree too. I’m in good company because both the Global Currency and Bond Markets believe me this morning.

Powell Is Lying - uniq  1

Macro grind

On September 15th my Early Look’s title was “Did Powell Lie?

A. Yes, on being “data dependent” on a SEP rate hike (or not), he lied… and
B. Yesterday, when he said that Bond Yields aren’t moving higher on Inflation Expectations, he lied

If you can’t see the immediate-term correlations between Oil (inflating) and short-term interest rates, that’s because your “AI” vision is limited to what the QQQs are “up year to-date” and/or you’re new to this and don’t do math.

If you don’t like looking at that definition of the truth, try this:

A. USD/Oil immediate-term correlation = +0.91
B. Both USD Index and UST 2yr Yields are at new CYCLE HIGHS this morning

Everyone on Wall Street knows that the Short-End of The Yield Curve = Fed Policy Expectations. Not everyone knows what it means WHEN that real-time market price (currently ramping to 5.16% UST 2yr) diverges from what Wall Street wants.

What else does everyone know? That many people (on Wall Street) want/need the Fed to stop raising rates.

Ok. So what do you do when you get your lawyer to “pause” (despite 2 straight months of REPORTED INFLATION re-accelerating away from his “2% target”) on rate hikes and the market raises rates anyway? A: Blame Canada?

Yes, my name is Mucker and I am Canadian.

Canadians have plenty of issues, but one of them isn’t waking up every CNBC morning and bowing at the alter of the US Federal Reserve and/or an unelected lawyer from Private Equity (Carlyle). Instead, this Canadian believes in both God and gravity.

So now, it’s The Gravity that’s got him.

And he’s not only lying about certain things, he’s looking quite uncertain about other things. Did you see what he did and then said when asked about a “Soft Landing”?

A. He took his eyes off the audience of Old Wall Media nodders, dropped his head, and looked down… then
B. He said he “wouldn’t call a soft landing his baseline expectation”

Ok. That’s new. So what is his new baseline expectation? I can go into another rant about that, but just look at his new economic projections. They aren’t for any landing. They’re for an economic ACCELERATION!

I’ve “live” tweeted pretty much every presser PE Powell has ever given on FOMC Rates Decision days.

From a body language, confidence, and truth-fullness perspective, I thought that was the worst explanation of a Fed Policy decision since the time he was a rookie on the rate hike job in 2018.

The FX, Bond, and US Stock Market pounded Powell for that. That’s what he deserved for lying to The American People.

Our levels

Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets

UST 10yr Yield 4.23-4.47% (bullish)
High Yield (HYG) 74.22-74.91 (bearish)           
SPX 4370-4500 (bearish)
NASDAQ 13,299-13,925 (bearish)
RUT 1795-1859 (bearish)
Energy (XLE) 89.71-93.13 (bullish)
Utilities (XLU) 62.02-65.16 (bearish)                                             
Shanghai Comp 3064-3114 (bearish)
Nikkei 32,316-33,605 (bullish)
BSE Sensex (India) 66,187-68,135 (bullish)
VIX 13.11-17.03 (bullish)
USD 104.41-105.40 (bullish)
Oil (WTI) 86.48-91.69 (bullish)
Gold 1904-1968 (bullish)
Copper 3.62-3.83 (bearish)
MSFT 316-332 (bearish)
AAPL 171-180 (bearish)

Best of luck out there today,


Keith R. McCullough
Chief Executive Officer

Powell Is Lying - 9.21.23