Distinction Matter - Subscribed Feeds

The growth of the senior population is a consequence of the demographic transition towards longer and healthier lives. Population aging, however, can pose economic and social challenges.

Here, Visual Capitalist's Marcus Lu maps the size of the world’s population aged 65+ for 1980, 2021, and 2050 (projected). The data is from the World Social Report 2023 by the United Nations.

Global Aging

Currently, population aging is most advanced in Europe, Northern America, Australia, New Zealand, and parts Eastern and Southeastern Asia.

According to the UN, in most countries in these regions, the proportion of older persons exceeds 10%, and in some cases, 20% of the total population.

Most parts of sub-Saharan Africa and Oceania (excluding Australia and New Zealand) are still in an early stage of this transition, while most countries in Central and Southern Asia, Western Asia and Northern Africa, Latin America, and the Caribbean are at an intermediate stage.

The size of the world’s senior population isn’t just growing in absolute numbers; it’s also growing as a share of the overall total. For example, in 2021, 1 in 10 people worldwide were over 65. By 2050, this is likely to be around 1 in 6.

While the shift towards older populations is largely irreversible, some critical measures are necessary to guarantee this transition. These include financial support for the senior population through pension plans, budgeting healthcare and long-term care costs, and implementing measures to adapt and innovate in labor markets to include seniors.

The Global Senior Population in 2100

What will the global senior population look like in the future? For more on that, look at this chart which highlights aging projections by country based on data and projections from the United Nations.

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

U.S. Centers for Disease Control and Prevention (CDC) officials found evidence that the Pfizer-BioNTech and Moderna COVID-19 vaccines caused multiple deaths before claiming that there was no evidence linking the vaccines to any deaths, The Epoch Times has learned.

(Illustration by The Epoch Times, Getty Images, Envato Elements)

CDC employees worked to track down information on reported post-vaccination deaths and learned that myocarditis—or heart inflammation, a confirmed side effect of the vaccines—was listed on death certificates and in autopsies for some of the deaths, according to an internal file obtained by The Epoch Times.

Myocarditis was also described as being caused by vaccination in a subset of the deaths.

In other cases, the CDC workers found that deaths met the agency’s definition for myocarditis, that the patients started showing symptoms within 42 days of a vaccine dose, and that the deceased displayed no virus-related symptoms. Officials say that after 42 days, a possible link between the vaccine and symptoms becomes tenuous, and they list post-vaccination deaths as unrelated if they can find any possible alternative causes.

In cases with those three features, it’s “absolutely” safe to say that the vaccines caused the deaths, Dr. Clare Craig, a British pathologist and co-chair of the Health Advisory and Recovery Team Group, told The Epoch Times in an email.

Despite the findings, most of which were made by the end of 2021, the CDC claimed that it had seen no signs linking the Moderna and Pfizer messenger RNA (mRNA) vaccines to any deaths reported to the Vaccine Adverse Event Reporting System (VAERS).

CDC officials in a letter to The Epoch Times dated June 13, 2023, said that there were no deaths reported to the VAERS for which the agency determined “the available evidence” indicated Moderna or Pfizer vaccination “caused or contributed to the deaths.”

The agency also said that evidence from seven deaths from thrombosis with thrombocytopenia syndrome following the Johnson & Johnson vaccination suggested that the vaccine led to people dying.

“That’s a scandal, where you have information like this and you continue to put out this dishonest line that there’s only seven deaths and they’re all unrelated to the mRNA vaccines,” Dr. Andrew Bostom, a heart expert based in the United States, told The Epoch Times.

The CDC is “concealing these deaths,” he said.

A CDC spokeswoman, presented with the file and dozens of questions about it, said that “determining a person’s cause of death is done by the certifying official, physician, medical examiner, or coroner, who completes the death certificate.”

The spokeswoman declined to explain why the CDC doesn’t consider autopsies or death certificates as evidence of causality, the criteria that would establish vaccine-caused deaths, or whether the numbers have been updated since 2023. She also declined to answer questions about specific deaths outlined in the file, citing “privacy and confidentiality.”

People who die in the United States with confirmed or suspected COVID-19 are counted as COVID-19 deaths. That count has included a number of deaths from unrelated causes. The CDC also in 2023 advised death certifiers to include COVID-19 on certificates even if the deaths happened years after COVID-19 infection.

“They are taking the exact opposite approach to COVID deaths! Every death after a test was a COVID death. No death after a vaccine is a vaccine death!” Dr. Craig said. She questioned what it would take for the CDC to admit that the vaccines have caused some myocarditis-related deaths.

More People Died

The file, acquired by The Epoch Times through a Freedom of Information Act request, has never before been reported. The file was obtained after U.S. authorities rejected another Freedom of Information Act request for the autopsies themselves. The file outlines the agency’s investigation into reports submitted to VAERS of suspected cases of myocarditis or a related condition, pericarditis, following COVID-19 vaccination.

CDC employees, starting in April 2021, contacted health care providers and other agencies to obtain medical records, death certificates, and autopsies as they sought to confirm whether each report was legitimate.

The file shows the CDC examined 3,780 reports through April 13, 2023, a small number of which were duplicates. Among the reported cases, 101 resulted in death.

In one instance, a 37-year-old man started suffering symptoms that can be caused by myocarditis, such as shortness of breath, shortly after receiving a Moderna COVID-19 shot. The man collapsed three days after vaccination and was soon pronounced dead.

Dr. Darinka Mileusnic, the medical examiner who examined the man, said in an autopsy report that the patient died of “post vaccination systemic inflammation response” which caused, among other problems, acute myocarditis, according to the CDC file.

The CDC worker who was assigned to look into the death wrote that it was “evident of a sudden death post second dose of Moderna vaccine.”

“One of the factor[s] to death [sic] is acute myocarditis. There are other findings related to VAE [vaccine adverse event] and non vaccine related. Thus, it can’t be distinguished that only vaccine may have caused the death,” the CDC employee wrote.

Dr. Mileusnic declined a request for comment through her employer, the Knox County Regional Forensic Center in Tennessee. The center said it would only provide an autopsy report if the decedent’s name and date of death were provided. The CDC file did not include names.

The Centers for Disease Control and Prevention headquarters in Atlanta on Aug. 25, 2023. (Madalina Vasiliu/The Epoch Times)

After another man, 24, died on Oct. 27, 2021, about two months after receiving a second Pfizer injection, his health care provider diagnosed him with myocarditis. An autopsy listed “complications of COVID-19 vaccine-related myocarditis” as the cause of death, according to the file.

A post-mortem test for COVID-19 returned negative, there were no viral organisms found in post-mortem testing of the heart, and there were no other signs of viruses causing the myocarditis, the notes show.

Another vaccine recipient, a 77-year-old man, was found dead at home on Nov. 14, 2021. The autopsy confirmed the man had pericarditis and listed the cause of death as “complications from the COV-19 booster,” according to the file.

The CDC worker who looked at that case said it met the CDC’s definition of pericarditis based on the autopsy and death certificate but noted there were comorbidities such as coronary artery disease that were listed as contributing to the death. The patient also received shots against influenza and shingles about two months before death, so “it is difficult to say that COV-19 vaccine alone caused pericarditis,” the worker wrote.

A voicemail left for the man’s doctor was not returned.

Among other deaths in the CDC file are:

• A male, whose age was redacted, suffered sudden cardiac death in April 2021 following a Johnson & Johnson vaccination. He was diagnosed with myocarditis, which was confirmed by the medical examiner. A CDC worker stated that the case did not technically meet the agency’s case definition, but they would “consider probable subclinical myocarditis, given the histopathological findings.”
• A 21-year-old woman who died in 2021 after seizures and cardiac arrhythmias following Pfizer vaccination was found on autopsy to have lymphocytic myocarditis. The CDC listed her case as confirmed myocarditis with no evidence of viral causes.
• A 45-year-old man was found dead in his bed in 2021 after Moderna vaccination but testing for myocarditis and pericarditis was not performed.
• A 55-year-old woman who was “found unresponsive in [a] field” in 2021 after Johnson & Johnson vaccination was confirmed on autopsy to have myocarditis and to have suffered a cardiac arrest. The death met the CDC’s case definition but concurrent upper respiratory infection “makes viral myocarditis a potential alternative cause,” a CDC worker stated. The medical examiner declined to comment.

People receive a dose of the COVID-19 vaccine at a vaccination site organized by Amazon in downtown Seattle on Jan. 24, 2021. (Grant Hindsley/AFP via Getty Images)

Pfizer, Moderna, and Johnson & Johnson did not return requests for comment.

Lot numbers for the vaccines injected into people who died were among the information in the file redacted by the CDC. Some vaccine lots have caused significantly more problems than others, according to CDC data obtained by the nonprofit Informed Consent Action Network.

Deaths in other countries from vaccine-induced myocarditis have been reported in journals, including deaths among young people. More deaths from vaccines in cases that didn’t include myocarditis have been confirmed by international authorities. Death certificates obtained by The Epoch Times from several U.S. states have also listed the COVID-19 vaccines as causing or contributing to dozens of deaths.

Overruling

The file and a tranche of emails also obtained by The Epoch Times shows the agency started intervening shortly after the vaccines were introduced in post-vaccination cases that led to death and sometimes overruled the certifier.

Take the case of a 23-year-old man who left home on April 13, 2021, to go for a jog and was found dead on the side of the road. His death occurred four days after receiving Johnson & Johnson’s COVID-19 vaccine.

Read more here...

A whistleblower at Boeing supplier Spirit AeroSystems died Tuesday morning following a struggle with a 'sudden, fast-spreading infection,' the Seattle Times reports.

45-year-old Joshua Dean, a former mechanical engineer and quality auditor from Wichita, Kansas, alleged that Spirit leadership ignored manufacturing defects on the 737 MAX, including 'mechanics improperly drilling holes in the aft pressure bulkhead of the MAX.' When he brought this up with management, he said that nothing was done about it. So he filed a safety complaint with the FAA - and said that Spirit had used him as a scapegoat while they lied to the agency about the defects.

"After I was fired, Spirit AeroSystems [initially] did nothing to inform the FAA, and the public" regarding the bulkhead defects, said Dean in his complaint.

In November, the FAA suggested to Dean in a letter that his claims had merit, writing "The investigation determined that your allegations were appropriately addressed under an FAA-approved safety program," adding "However, due to the privacy provisions of those programs, specific details cannot be released."

Dean also gave a deposition in a Spirit shareholder lawsuit.

The shareholder lawsuit alleging that Spirit management withheld information on the quality flaws and harmed stockholders was filed in December. Supporting the suit, Dean provided a deposition detailing his allegations.

After a panel blew off a Boeing 737 MAX plane in January, bringing new attention to the quality lapses at Spirit, one of Dean’s former Spirit colleagues confirmed some of Dean’s allegations. -Seattle Times

He had been in good health, and 'was noted for having a healthy lifestyle,' according to the report.

He had been in critical condition for two weeks, according to his aunt Carol Parsons, who said he became ill and went to the hospital due to breathing difficulties. He was intubated, after which he developed pneumonia and then MRSA, a serious bacterial infection.

His condition deteriorated rapidly, and he was airlifted from Wichita to a hospital in Oklahoma City, Parsons said. There he was put on an ECMO machine, which circulates and oxygenates a patient’s blood outside the body, taking over heart and lung function when a patient’s organs don’t work on their own. -Seattle Times

Doctors had considered amputating both hands and both feet.

"It was brutal what he went through," said Parsons. "Heartbreaking."

Dean was fired in April 2023, after which he filed a complaint with the Department of Labor, alleging he had been terminated in retaliation for blowing the whistle.

He was represented by the South Carolina law firm that represented Boeing whistleblower John "Mitch" Barnett, who was found dead in an 'apparent suicide' in March in Charleston.

Barnett was in the middle of giving depositions suggesting that Boeing retaliated against him over complaints related to quality issues when he was found dead from a gunshot wound.

The Charleston County Coroner’s Office reported Barnett’s death appeared to be “from a self-inflicted gunshot wound.” Almost two months later, the police investigation into his death is still ongoing. -Seattle Times

"Whistleblowers are needed. They bring to light wrongdoing and corruption in the interests of society. It takes a lot of courage to stand up," said Brian Knowles, one of Dean's lawyers. "It’s a difficult set of circumstances. Our thoughts now are with John’s family and Josh’s family."

In March, Boeing was rumored to be in talks to buy Spirit, as both companies have come under increasing pressure from airline customers and federal regulators to shore up quality issues following a January 5th incident in which a door plug blew out mid-flight on a 737 MAX 9.

Alaska Airlines flight #AS1282, a Boeing 737 MAX 9, experienced a rapid decompression after the loss of a large panel that included an emergency exit door on the left side of the plane.
The flight made a safe return to Portland (PDX).pic.twitter.com/KH4gs0X4o6

Four days later, United Airlines found "loose bolts" on 737 MAX doors following an emergency inspection.

According to the Statista Market Insights, more than 15 percent of food sales in Denmark are of organic products, making the country the biggest market for organic food in relative terms.

As Statista's Katharina Buchholz shows in the chart below, Austria, Luxembourg and Switzerland are the only other countries achieving a share above 10 percent, showing that in a global context, food marketed as organic is still a somewhat of a niche despite all the hype surrounding it.

You will find more infographics at Statista

Taking into consideration only foods marketed as organic (and not those which are not sold as such, for example in countries with less formalized food markets), the global share of organic products in total food revenue was just 1.9 percent.

With Germany in rank 7, a strong preference for organic food in German-speaking countries is visible. Interestingly, Benelux and Scandinavian countries are not consistingly achieving rates above 5 percent. Statista analysts also took a look at the development of the market and concluded that it is only growing slowly in most places as price remains a (perceived) hurdle for many consumers.

Also taking into account country size, the United States still had the largest market for organic food out of any country despite a lower share of organic food at 7.2 percent of all food sales in 2023.

This is the equivalent of around $70 billion of the $975 billion U.S. food market (excluding out-of-home).

In comparison, all of Europe generated food revenues almost $2 trillion but lower organic uptake in Eastern and Southern Europe led to a share of 3.9 percent organic food sales overall - the equivalent to an organic food market only slightly bigger than that of the U.S. at $77.6 billion.

Authored by Katabella Roberts via The Epoch Times,

A group of six Republican state attorneys general filed a lawsuit against the Biden administration’s Department of Education on Tuesday over what they said were “radical and illegal” changes to Title IX rules.

The lawsuit, led by Kentucky Attorney General Russell Coleman and Tennessee Attorney General Jonathan Skrmetti, was filed in the U.S. District Court for the Eastern District of Kentucky.

In their legal filing, the GOP attorneys general argued that the department overstepped its authority when rolling out new updates to Title IX rules that expanded protections to students by incorporating gender identity into the legal text.

They further claimed the changes to the rules override state laws and will harm Tennessee students, families, and schools. The attorneys general called on the court to pause and overturn the newly expanded policy.

“The U.S. Department of Education has no authority to let boys into girls’ locker rooms,” Mr. Skrmetti said in a statement.

“In the decades since its adoption, Title IX has been universally understood to protect the privacy and safety of women in private spaces like locker rooms and bathrooms. Federal bureaucrats have no power to rewrite laws passed by the people’s elected representatives, and I expect the courts will put a stop to this unconstitutional power grab.”

Mr. Coleman, meanwhile argued the new changes to Title IX rules would “rip away 50 years of Title IX’s protections for women and put entire generations of young girls at risk.”

“As Attorney General, it is my duty to protect the people of Kentucky. As a Dad, it is my duty to protect my daughters,” Mr. Coleman said. “Today, I do both.”

Biden Admin Unveils Changes to Rules

The Kentucky attorney general added that his office is joining the lawsuit to “lead this fight for our daughters, granddaughters, nieces, and all the women of our Commonwealth.”

Title IX of the Education Amendments of 1972 is a longstanding policy designed to protect people from discrimination based on sex in schools.

Specifically, the protections prohibit sex-based discrimination in any school or any other education program that receives funding, either directly or indirectly, from the federal government.

However, the Department of Education last week rolled out newly updated Title IX rules that include expanded protections for LGBTQ students for the first time.

Under the updated rules, the prohibition against discrimination based on “sex” has been updated to include a prohibition against discrimination “based on sex stereotypes, sex-related characteristics (including intersex traits), pregnancy or related conditions, sexual orientation, and gender identity.”

The new rules also dictate that any K-12 school or institution of higher education that receives any federal funding may not separate or treat individuals differently based on sex “in a manner that subjects that person to more than de minimis harm,” which Republicans say will lead to shared bathrooms, locker rooms and more.

It does, however, clarify that such separations are allowed “in the context of sex-separate living facilities and sex-separate athletic teams.”

The rules also state that all “non-confidential” school employees are required to notify a Title IX coordinator if they learn of any violations.

According to the Biden administration, the new regulations are set to take effect on Aug. 1.

President Joe Biden (R) speaks in the Roosevelt Room of the White House, on June 30, 2023. (Jim Watson/AFP via Getty Images)

‘Radical, Illegal Attempt to Rewrite the Statute’

In a statement announcing the newly updated rules, U.S. Secretary of Education Miguel Cardona said they “build on the legacy of Title IX by clarifying that all our nation’s students can access schools that are safe, welcoming, and respect their rights.”

“The final regulations promote educational equity and opportunity for students across the country as well as accountability and fairness while empowering and supporting students and families,” the department said.

However, the attorneys general of Kentucky and Tennessee claim the new rules could put schools at risk of losing federal education funding, including access to free and reduced lunch programs and Individuals with Disabilities Education Act (IDEA) grants if they fail to abide by them.

The new rules would also require K-12 schools, colleges, and universities to “allow males identifying as females access to women’s sports, bathrooms and locker rooms,” they said.

“Under this radical and illegal attempt to rewrite the statute, if a man enters a woman’s locker room and a woman complains that makes her uncomfortable, the woman will be subject to investigation and penalties for violating the man’s civil rights,” Mr. Skrmetti said.

“Federal bureaucrats have no power to rewrite laws passed by the people’s elected representatives, and I expect the courts will put a stop to this unconstitutional power grab.”

The attorneys general of Indiana, Ohio, West Virginia, and Virginia have also joined the lawsuit with Tennessee and Kentucky.

It marks the latest lawsuit against the new Title IX changes after Republican attorneys general from nine states including Alabama and Louisiana filed similar legal challenges against the newly updated protections on Monday.

The Texas attorney general also has filed a lawsuit against the expanded rules, calling them “unlawful” and claiming they mandate schools comply with a “radical gender ideology.”

Authored by Peter Reagan for Birch Gold Group,

President Biden’s decision to participate in the Ukraine-Russia conflict back in February 2022 has taken a new and dangerous turn this year.

The U.S. dollar could suffer dramatically as a result.

Before we explore that new development, we’re going to start by quickly summarizing some of the events that led the United States to this point.

Let’s begin...

In the February 28th, 2022 issue of Matt Levine’s Money Stuff column for Bloomberg, Levine wrote about the sanctions placed on Russia:

the U.S., the European Union, the U.K., Switzerland, Singapore and other countries announced harsh sanctions against Russia for its unprovoked invasion of Ukraine. There are a lot of these sanctions – banning Russian flights through European airspace, limiting Russian banks’ access to the SWIFT interbank messaging system, etc. – but the most drastic might be U.S., U.K. and EU bans on any transactions with the Russian central bank. The bulk of Russia’s foreign reserves are held in the form of securities, deposits at other central banks and deposits at foreign commercial banks. A ban on transactions with Russia’s central bank means that it can’t sell those securities or access those deposits. Its foreign currency reserves turned out to be mostly useless.

As is the case with most geopolitical conflicts, there is always a lot more to the story than gets reported in the mainstream media (Russian, U.S., or otherwise). For example, some of the history behind the current conflict actually dates back to 2014.

Nonetheless, the bottom line is that the financial sanctions placed on Russia in 2022 were supposed to have a severe impact on Russia’s economy.

Unfortunately, for President Biden and NATO allies…

Russia shrugs off brutal sanctions

If the sanctions placed on Russia in 2022 had their intended effect, Russia’s economy would’ve been wrecked, set back 30 years or more. It would’ve become a third-world country by now.

But that hasn’t happened. Russia has prospered despite those sanctions.

A revealing NPR interview shed light on some of the economic impacts, as of December 2023:

Russia has been hit with huge economic sanctions since it invaded Ukraine nearly two years ago. But the Russian economy has remained strong, defying many economists’ expectations.

Alexandra Prokopenko, a fellow at Carnegie Eurasia Center, explained:

Economic growth in Russia in 2023 is likely to exceed 3%. It is – in terms of figures, I mean, it’s great. It’s more than the economy of the United Kingdom or of Germans’ economy. So what’s behind these figures is that over a third of this growth is attributed to the war economy, where defense-related industries are flourishing at double-digit rates.

Now, it makes sense that war would boost military and defense-related industries. But Russia’s economy also doesn’t appear to be suffering much.

In fact, according to Bloomberg, Russia’s economy is actually at risk of overheating.

Even left-leaning think tanks can’t do much more than wag their fingers and exclaim “just you wait”:

Russia’s economy is now stable both in spite of and as a result of Western sanctions…

Russia’s economy could begin to see major challenges in the next year-and-a-half, think tank researchers write.

Just like Bidenomics! “Sure, it’s not working yet, but it will eventually, any day now…”

Nonsense. Russia’s currency, GDP, and banks are thriving:

The ruble is steady at about 92:1 (compare this to Biden’s claims from 2022 that “the ruble will be rubble”). Russia’s debt-to-GDP level is 17.2%, compared with the U.S. level of 131.0%. Russian bank profits for 2024 are projected to exceed the record profits in 2023.

In other words, Russia’s economy is outperforming the U.S. by almost every measure, and is doing so on a more sustainable level from a debt perspective.

So, let’s take stock…

Two years after these shock-and-awe sanctions intended to pressure Russia into ending its invasion of Ukraine:

• Russia’s economy is outperforming not only the U.S. but also NATO allies (including the UK’s, Germany’s etc.)

• The embargo on Russian oil by the West had zero impact on Russian exports

• Russia’s defense and military industries are booming (talk about unintended consequences!)

Don’t misunderstand! I’m no fan of Vladimir Putin.

But I’m also not a fan of the Biden administration’s half-baked plan to teach Russia a lesson. It’s a total failure.

At this point, a rational person would assess the situation, look at the data and make a new plan.

Never one to learn from his mistakes, President Biden has instead opened a new front in his financial war on Russia.

This time, though, I’m seriously concerned he’s gone too far…

“This is outright theft”

Thanks to a recently passed piece of legislation, the Biden administration plans to take control of Russia’s frozen assets.

Rickards provided a nice summary:

The House passed the “REPO Act” this weekend, which authorizes the administration to seize about $20 billion worth of Russian assets sitting in U.S. banks, mostly Treasury securities. It would then transfer that money to Ukraine.

The securities were legally purchased by Russia using dollars earned through the sale of oil prior to the war. They were frozen in early 2022. That means the securities are still legally owned by Russia, but they can’t be sold or pledged, and Russia can’t receive the interest or cash at maturity.

But this legislation goes one step further and authorizes the actual seizure of these assets. This is outright theft and a violation of the Sovereign Immunities Act, but no one seems to care about that.

We’ve discussed dollar weaponization repeatedly over the last couple of years.

This development is next-level.

Freezing assets is bad enough – but seizing those legally-purchased assets? In violation of all international law?

That’s the act of an autocrat. Which is exactly what Biden calls Putin.

Is this a good idea? Probably not. Russia already can’t get its hands on those assets. So how does stealing them make Russia’s situation worse?

It doesn’t!

Instead, what it does accomplish (again, unintended consequences) is send a message to the rest of the world.

It’s not a hopeful message.

Are dollars assets? Or liabilities?

In today’s financialized world, most financial assets are based on debt. They’re promises to pay. As Ray Dalio recently reminded us:

…the dollar, to a lesser extent the euro, to a much lesser extent the yen, and to an even lesser extent the Chinese renminbi… are held in debt assets – i.e., they are debt-backed money—i.e., currency = debt. In other words, when you hold these monies, you are holding debt liabilities, which are promises to deliver you money.

The REPO Act has broken this promise to deliver money.

Which begs the question: What if central banks start to view dollars as a liability rather than an asset?

This Wall Street Journal article shows that economists were already grappling with this question back in 2022:

Recent events highlight the error in this thinking: Barring gold, these assets are someone else’s liability – someone who can just decide they are worth nothing…

What can investors do? For once, the old trope may not be ill advised: buy gold. Many of the world’s central banks will surely be doing it.

Indeed, 2022 was the biggest year for central bank gold-buying in history.

2023 was a close second-place, coming in just 4% below the previous year’s record.

The lesson is quite clear. What we think of as assets can become liabilities overnight.

So what can we do about it?

Do you have enough non-debt money?

Between brutal loss of purchasing power over the last three years, and now this escalation of dollar weaponization, you have to wonder: How much more abuse can the dollar take?

There’s no way to know.

That’s why Dalio wants you to ponder the question, “Do you have enough non-debt money?”

Gold, on the other hand, is a non-debt-backed form of money. It’s like cash, except unlike cash, which is devalued by risks of default or inflation, gold is supported by risks of debt defaults and inflation. It is held by central banks and other investors for this reason. In fact, gold is the third-most-held reserve currency by central banks, more so than the yen or renminbi…

When the financial system is working well – which is when there aren’t debt and inflation crises and the borrower-debtor governments printing debt-backed monies are meeting their obligations and paying their interest without printing and devaluing money – debt assets and other financial assets are good assets to hold; on the other hand, when the reverse is the case, gold is a good asset to own. That’s the main reason that gold is a good diversifier and why I have some in my portfolio.

Physical precious metals are just about the only asset that isn’t someone else’s liability. They aren’t an easily-broken promise to pay. They’re not an obligation.

With physical precious metals, you either own them or you don’t. Learn more about why physical gold ownership is vital.

Do you have enough non-debt money?

If all the promises to pay you own were broken, where would that leave you?

*  *  *

With global instability increasing and election uncertainties on the horizon, protecting your retirement savings is more important than ever. And this is why you should consider diversifying into a physical gold IRA. Because they offer an easy and tax-deferred way to safeguard your savings using tangible assets. To learn more, click here to get your FREE info kit on Gold IRAs from Birch Gold Group.

Authored by Ted Dabrowski and John Klingner via Wirepoints.org,

Nearly one year ago, Chicagoans cheered Mayor Lori Lightfoot’s removal from office.

Gone was her toxic attitude. Her flippant dismissal of the city’s many crises. Her abrasive politics.

In her place was Brandon Johnson, who promised a more inclusive approach to building a “better, stronger, safer Chicago.” 

It hasn’t turned out that way.

Today, there’s little disagreement that Mayor Johnson has disappointed on most key issues. On crime. On policing. On migrants. On education. On governance. Even on foreign affairs. 

Two recent polls show Chicagoans have a low opinion of Johnson and his performance so far.

A January poll by Tulchin Research found just 21% of registered Chicago voters approved of Johnson. And a new Harris poll shows just 9% of city residents rated Johnson’s performance as above average while 50% rated his performance as below average. 

It’s reached the point where some Chicagoans are pursuing a recall initiative to remove the mayor.

As we approach Johnson’s one-year anniversary, let’s review how he’s mishandled the city’s key issues.

On crime 

Even before taking office, Mayor Johnson fully embraced soft-on-crime policies. Johnson said in 2020 that defunding the police is not “a slogan, it’s an actual real political goal.” He later defended looting as “an outbreak of incredible frustration and anguish” tied to “a failed racist system.” And at a panel for a police-free future, Johnson said “part of it is removing ourselves away from this state-sponsored policing…”

Johnson has continued to openly excuse crime and violence since becoming Mayor. He declared the youth of last summer’s teen takeovers as just kids being “silly.”  He later pushed back against those who complained of youth mobs taking over city streets: “We’re not talking about mob actions…to refer to children as baby Al Capones is not appropriate.”

All that rhetoric has helped fuel Chicago’s crime problem. 2023 ended up with a five-year high in major crimes committed, while Chicago led the country again in homicides for the 12th year in a row. And while murders are down 10% this year, robberies and violent crimes overall are currently running at a six-year high.

Despite that rise in violence, Johnson earlier this year canceled ShotSpotter, a gunshot detection technology, to appease soft-on-crime advocates who declared the program “racist.” He was later pressured to extend the contract through November to ensure ShotSpotter would be in place during the Democratic National Convention. 

The saga is not over, however, as now there’s a concerted effort by several aldermen to override Johnson’s decision to get rid of the program. They call ShotSpotter an ‘invaluable tool’ for fighting crime in their homicide-ridden wards.

On illegal immigrants

Mayor Johnson never had a plan – and still doesn’t – for how to handle the inflow of illegal migrants to Chicago. That’s led to a series of walkbacks, unforced errors and costly mistakes by him and his administration. The mayor continues to blame Texas Gov. Greg Abbott for the inflow, but it’s Johnson’s continued support of Chicago’s failed sanctuary status and his increased handouts that keep the migrants coming in. 

The Johnson administration has committed nearly $400 million to migrant health and welfare so far and that’s created outrage across the city’s black and brown communities, many of whom protest that the city’s resources are being diverted away from their own struggling neighborhoods. They feel they’ve become second class citizens in their own city. 

And then there was the Mayor’s flip-flop on his traveling to the U.S.-Mexico border. Johnson originally said he would travel there to see the impact of the migrant crisis first-hand, but walked that back a few weeks later, with the excuse that he had too much to do and that “I’m doing all of that with a Black wife raising three Black children on the west side of the city of Chicago. I am going to the border as soon as possible.” Mayor Johnson has yet to visit the border.

There’s also the tent city debacle, where the Brighton Park site Johnson chose to host a migrant encampment turned out to be an environmental health hazard. Gov. J.B. Pritzker had to step in and block Johnson and the city from proceeding with the 2,000-bed encampment.

On schools

Johnson staked out his vision for K-12 education long before he ran for mayor, declaring he was “against the structure” of education and decrying homework, standardized tests and selective enrollment schools. 

His first step in enacting that vision, a CPS school board resolution calling for a “transition” away from selective enrollment schools and “school choice,” sparked a major backlash from both parents and the state’s political class. Chicago’s selective enrollment and magnet schools are actually among the best, most diverse schools in the state, where black and Hispanic students achieve the same high marks as white students.

A bill protecting those schools from closure recently passed overwhelmingly in the House, serving as a direct repudiation of the Mayor’s efforts.

On Gaza

The mayor recently took the tie-breaking vote in support of a city resolution that called for a ceasefire in Gaza.

That, from the city that leads the country in murders and just hit a five-year high for major crimes.

Even Saturday Night Light Live mocked Johnson and the city council, joking that Gaza had in return called for a ceasefire in Chicago.

On tax hikes

Johnson’s failure to pass his signature “Bring Chicago Home” initiative, a real-estate transfer tax hike to address homelessness, highlighted how little support the mayor has.

Passage of the tax should have been a slam dunk. It was structured to deliver small tax cuts to the overwhelming majority of Chicagoans, while hiking taxes on the wealthy few.

The tax hike, effectively a referendum on Johnson’s performance, failed 52 to 48, dealing a significant blow to the mayor’s authority.

On a new Bears stadium

Johnson is looking for any win to lift his flagging popularity. Cue his support for the Chicago Bears’ plan for a new multi-billion dollar stadium with more than $1.5 billion in taxpayer subsidies.

Never mind that Johnson originally rejected the idea of public subsidies for a stadium during his candidacy, saying that such money would be better spent on new housing, removing lead pipes or “dozens of other urgent needs.” 

What makes Johnson’s desperation for a “win” so obvious is that no prominent Democrat stood with him in support, certainly not the ones that matter most: Gov. J.B. Pritzker, Senate President Don Harmon and House Speaker Chris Welch all expressed skepticism of the deal.

*  *  *

Perhaps nothing better captures the depth of the mayor’s struggles more than this: Johnson was asked not to attend Monday’s funeral of slain police officer Luis Huesca.

His mother said, “Tell the mayor not to come.  We do not want him there. Tomorrow is about my son and my family’s grief. We do not want him to disrespect his memory. The mayor does not support the police.”

A Chicago mayor, not attending the funeral of a fallen officer. Nothing more needs to be said.

Read more from Wirepoints:

• Death to Facts: Northwestern journalism prof Steven Thrasher tells pro-Palestinian demonstrators to reject objective reporting

• Floundering Illinois wind energy program blamed partly on (you guessed it) climate change

• Traumatizing Chicago robberies, violent crimes at six-year high

• Even more evidence Illinois can thank the federal government’s covid bailouts for its budget bonanza

Two days after the yen soared after crashing to a 34 year low of 160 against the US, when the Japanese Ministry of Finance reportedly spent around 5 trillion yen, or just over $30 billion, to push the imploding Japanese currency to levels not seen in ... about 48 hours, moments ago with much of the impact from the first intervention having fizzled, the Japanese Ministry of Finance appeared to step in again when moments after the US cash market close, USDJPY cratered in seconds in the second Japanese intervention in as many days.

Of course, one can't help but be amused by the sheer amateur hour at the BOJ where the second consecutive intervention, one which will cost the MOF another $30 billion or so, has managed to push the yen to levels not seen since... last week.

And speaking of the intervention cost, while we won't know how much they officially cost Japan until the end of the month, what is notable is that the first intervention - which took place amid super thin liquidity due to a holiday in Japan which typically exacerbates market moves - cost nearly as much as one of the interventions in 2022, when they bought a record amount of yen, according to a Bloomberg analysis of central bank accounts.

"Despite spending ¥5 trillion in a market where there should have been little trading activity, the yen was pushed up by only a little over ¥5 and quickly recovered more than half its value,” said Takuya Kanda, the head of research at Gaitame.com Research Institute. “That doesn’t seem very cost effective” compared to intervention two years ago, he said.

What is notable about this particular intervention is that it took place just 2 hours after the latest Fed decision - which was viewed as moderately dovish due to the greater than expected QT taper. And indeed, it would be pointless to intervene had the Fed come out as hawkish and sent the dollar soaring.

In fact, one can argue that the BOJ and MOF - having had discussions with Powell  and Yellen about this intervention ahead of time  - received some  assurance that as far the Fed and Treasury are concerned, the US dollar isn't going to spike in the near-future. In fact, one can probably go so far as  speculating that Yellen actually leaked to the BOJ what the next NFP and CPI prints will be so that Japan doesn't waste tens of billions in yentervention firepower only to watch the JPY plunge again in two days  when a red hot jobs print send the USD soaring.

If so, we've seen the dollar highs for the year.

Having adversely intervened in virtually every other M&A deal in the past 3 years, the Biden FTC will reportedly allow Exxon's $60 billion purchase of Pioneer to go through after the companies agreed to minor concessions, Bloomberg reported citing people familiar with the matter. The announcement of the deal will likely come any moment, and the resulting deal will make Exxon - a company which Biden once said makes money money than god - far and away the biggest oil and natural gas producer in the Permian Basin, North America’s largest US oil field, and also the biggest energy company in the US.

Pioneer shares that had been down more than 2% on the day reversed those losses and were trading up as much as 0.9% on the news. Hess Corp, the target of a takeover bid by Chevron, also climbed 0.9% although the probability of that deal passing is far lower especially in light of the ongoing arbitration with Exxon over Guyana.  Chevron, Occidental and Chesapeake are among companies with large pending takeovers that are undergoing in-depth reviews before the FTC.

The Pioneer deal will combine two fast-growing Permian operations, lifting Exxon’s production in the basin to the equivalent of about 2 million barrels a day by 2027, up from about 600,000 last year.

More than 50 lawmakers - obviously mostly communists, pardon, democrats - urged the FTC in March to increase scrutiny on concerns a $230 billion wave of consolidation in would increase energy prices for consumers, squeeze suppliers and suppress wages. In short: enforce more Soviet-style central planning and crush conventional capitalism. As a result, investors had feared the agency, which has become more a ruthless enforcer of authoritarian anti-capitalism under Democrat admin puppet Lina Khan, would stand in the way of several large deals, especially in an election year when the Biden administration is seeking to prove its climate credentials and contain gasoline prices at all cost.

In response to the ruling communists, oil executives have claimed the deals will benefit shareholders, consumers and the environment. Exxon CEO Darren Woods said the Pioneer deal would lower its cost of production, making US barrels more competitive in the global market, and provide a strong platform for growth, which would ultimately benefit consumers. Exxon also pledged to reduce climate-warming emissions from Pioneer operations to net zero by 2035, accelerating the prior target by 15 years.

The Biden administration has constantly been at odds with the oil industry, but easing through what many executives see as necessary consolidation is likely to improve relations. With domestic crude prices up roughly 14% this year and tensions rising the Middle East, the administration is vulnerable to Republican attacks on measures that hurt the oil industry and raise fuel prices.

Powell to traders today...

h/t @ForexLive

The bigger than expected QT taper announcement juiced markets (stocks and bond prices up, dollar down) into Powell's press conference, then got spooked lower as he admitted "inflation has shown a lack of further progress... and gaining confidence to cut will take longer than thought."

But that dip didn't last long and yields puked, stocks soared, gold rallied and the dollar puked...

Source: Bloomberg

The market shrugged off Powell's comments about "whether rates are at their peak will depend on data" which opened up the path of possible rate-hikes, but he dd add that "he doubts next move will be a hike."

CNBC's Steve Liesman asked the big question that everyone should be asking: you are 'sort of easing' by reducing QT while holding rates flat because you're not confident that inflation is under control - wassup with dat?

Powell replied with some words that meant nothing, stating that they have long planned on tapering QT and claimed that 'reduction in balance sheet run-off is not policy-easing'.

"This is not the easing you're looking for..."

By the close, all of Powell's pig-kissing lipstick had been wiped off (see below for the coordinated crypto/nasdaq take-down) as stocks saw solid gains erased in the hour after Powell stopped speaking... Small Caps and The Dow managed to hold on to the gains but Nasdaq and S&P closed nearer the day's lows...

'Most Shorted' stocks saw a massive squeeze (+5%) on the FOMC headlines, before the late day selling pressure hit...

Source: Bloomberg

MAG7 stocks ended the day unchanged after giving back their post-Powell gains...

Source: Bloomberg

Treasury yields plunged 6-8bps across the curve on the day, with the short-end outperforming, dragging all yields lower on the week...

Source: Bloomberg

The 2Y Yield snapped back below 5.00% once again...

Source: Bloomberg

The yield curve (2s30s) jerked flatter initially, then steepened dramatically back to flat on the week...

Source: Bloomberg

The dollar tumbled on the non-easing 'easing' (but bounced back a bit after Powell finished speaking)...

Source: Bloomberg

Gold surged back above $2300 on the non-easing...

Source: Bloomberg

Bitcoin bounced back on the FOMC statement, recovering some of last night's bloodbathery, but somebody did not want it back to $60,000 and that smackdown dragged stocks down with it...

Source: Bloomberg

Oil prices ignored all the fuss around The Fed and fell for the third day in a row (its biggest daily drop since early Jan) with WTI back below $80 at six-week lows...

Source: Bloomberg

Finally, rate-cut expectations (hawkishly) rose on the day with one-or-two cuts in 2024 now 50-50 and two-or-three cuts more in 2025 around 50-50 also...

Source: Bloomberg

And, also Powell explained that he "doesn't see the stag or the 'flation" in markets... well this should help Jay...

Source: Bloomberg

We can't help but feel like Powell is awfully eager to 'loosen' policy... but he made it clear that the 2024 election "just isn't a part of the Fed's thinking."

So, that's that then!

Authored by Mike Shedlock via MishTalk.com,

It’s ridiculous to have red lines if you are not going to do anything when they are crossed. So what should Biden do?

China Has Crossed Biden’s Red Line on Ukraine

A Wall Street Journal Op-Ed moans China Has Crossed Biden’s Red Line on Ukraine.

President Biden warned China two years ago not to provide “material support” for Russia’s war in Ukraine. On Friday, Secretary of State Antony Blinken conceded that Xi Jinping ignored that warning. China, Mr. Blinken said, was “overwhelmingly the No. 1 supplier” of Russia’s military industrial base, with the “material effect” of having fundamentally changed the course of the war. Whatever Mr. Biden chooses to do next will be momentous for global security and stability.

Mr. Biden can either enforce his red line through sanctions or other means, or he can signal a collapse of American resolve by applying merely symbolic penalties. Beijing and its strategic partners in Moscow, Tehran, Pyongyang and Caracas would surely interpret half-hearted enforcement as a green light to deepen their campaign of global chaos. Mr. Xi sees a historic opportunity here to undermine the West.

What sanctions? On Who? On What? For How Long?

Op-ed writer Matt Pottinger provided no details, he just wants action. He needs to explain what sanctions make any sense at all, and how they would work.

Numerous US sanctions on Russia, China, Iran, all failed. Hell some of them on Russia and China not only failed they backfired.

So funny. Adding to my post on red lines and sanction failures.

How China Gets Around US Sanctions on Semiconductors

On February 18, 2024, I explained How China Gets Around US Sanctions on Semiconductors

How Russia Makes a Mockery of US Sanctions in One Picture

Unprecedented US and EU sanctions against Russia have had no impact on Russia’s oil exports or revenue. Who’s the beneficiary?

On December 29, 2023 I noted How Russia Makes a Mockery of US Sanctions in One Picture

On September 19, 2023, I commented Lesson of the Day: Sanctions Don’t Work Because They Create New Markets

Why Sanctions Fail

• Someone always has an incentive to break sanctions.

• Sanctions create new markets.

This is how Russia sells oil and how China gets access to equipment and parts.

In the case of chips, the US has forced China into a path to self-sufficiency. Hooray?!

Matt Pottinger wants sanctions. He should name some. Nah, what he really wants is to promote his book “The Boiling Moat: Urgent Steps to Defend Taiwan.”

What Color Are Biden’s Red Lines?

On March 10, I asked Are Biden’s Red Lines to Netanyahu Really Yellow or Green?

Presumably you know the answer now, but if not, please consider this idle threat: Biden Threatens Sanctions on Israeli Soldiers Yet Wants More Money for Israel

If you are going to have red lines, I suggest they should be red.

Israel vs China Red Lines

In the case of Israel, there was an easy remedy. Biden could have withheld aid. Instead, when Israel repeatedly crossed lines, Biden stepped up the aid further emboldening Netanyahu.

In the case of China, there are no sanctions or policy actions that make any sense, so there should not be any red lines.

Attempting to set foreign policy for the world is a huge mistake. And setting red lines you cannot or will not do anything about makes one look silly.

Authored by Jonathan Turley,

Northwestern University has agreed to a controversial settlement with pro-Palestinian protesters encamped on its campus this week, including a commitment for scholarships for Palestinians, Palestinian faculty appointments, and special housing for Muslim students.

The protesters will also be allowed to continue their protests while agreeing to stay in a particular area of campus.  It will also put the students and supporting faculty on bodies to review any university investments and purchases, a major demand from supporters of the Boycott, Divestment and Sanctions (BDS) movement.

Previously, protesters had reportedly prevented some students and faculty from entering buildings and engaged in property damage.

The Daily Northwestern reported the details of the deal and noted

“the University has committed to provide a conduit for students to engage with the Investment Committee of the Board of Trustees. It will also re-establish an Advisory Committee on Investment Responsibility this fall, which will include students, faculty and staff.

...

In addition, the University committed to some support for Palestinian students and faculty in the agreement. NU will ‘support visiting Palestinian faculty and students at risk,’ and will provide the cost of attendance for five Palestinian undergraduates to attend Northwestern.

...

The University also committed to providing an ‘immediate temporary space for MENA/Muslim students’ — a longtime demand from students on campus — and will provide and renovate a house for MENA/Muslims students as soon as possible. The final house is expected to come in 2026.”

It also includes a commitment of the university to intervene with employers to guarantee that students suffer no consequences for participating in protests in their jobs and internships.

Northwestern (my alma mater) has always chosen the path of least resistance when it comes to protesters, including at times surrendering core academic functions. I have been particularly critical of the loss of freedom of speech and academic integrity on campus.

Students previously succeeded in cancelling a speech by former U.S. Attorney General Jeff Sessions. Student Zachery Novicoff embodied the rising intolerance to free speech on campus. He is quoted as saying “There’s a limitation to free speech. That ends at overtly racist old white dudes.”

I criticized former Northwestern University President Morton Schapiro for his lack of support for free speech on campus. Schapiro denounced what he called “absolute” free speech positions and endorsed speech sanctions, including treating speech as a form of assault.

During his tenure, the university often seemed a mere pedestrian to mob action taken against dissenting voices. For example, we previously discussed a Sociology 201 class by Professor Beth Redbird that examined “inequality in American society with an emphasis on race, class and gender.”  To that end, Redbird invited both an undocumented person and a spokesperson for the Immigration and Customs Enforcement.  It is the type of balance that is now considered verboten on campuses.

Members of MEChA de Northwestern, Black Lives Matter NU, the Immigrant Justice Project, the Asian Pacific American Coalition, NU Queer Trans Intersex People of Color and Rainbow Alliance organized to stop other students from hearing from the ICE representative.  However, they could not have succeeded without the help of Northwestern administrators (including  Dean of Students Todd Adams).  The protesters were screaming “F**k ICE” outside of the hall.  Adams and the other administrators then said that the protesters screaming profanities would be allowed into the class if they promised not to disrupt the class.  Really?  They were screaming profanities and seeking to stop the class but would just sit nicely as the speaker answered questions?

Of course, that did not happen. As soon as the protesters were allowed into the classroom, they prevented the ICE representative from speaking.  The ICE official eventually left and Redbird canceled the class to discuss the issue with the protesters that just prevented her students from hearing an opposing view.

The comments of the Northwestern students were predictable after being told by people like Schapiro that some offensive speech should be treated as a form of assault.  SESP sophomore April Navarro rejected that faculty should be allowed to invite such speakers to their classrooms for a “good, nice conversation with ICE.” She insisted such speakers needed to be silenced because they “terrorize communities” and profit from detainee labor. Here is the face of the new generation of censors being shaped by speech-intolerant academics like Schapiro:

“We’re not interested in having those types of conversations that would be like, ‘Oh, let’s listen to their side of it’ because that’s making them passive rule-followers rather than active proponents of violence. We’re not engaging in those kinds of things; it legitimizes ICE’s violence, it makes Northwestern complicit in this. There’s an unequal power balance that happens when you deal with state apparatuses.”

Last year, the Northwestern student body banned press from meetings to protect students from the harm of media coverage. The students also have previously frozen funds of conservative groups.

The Northwestern journalism faculty is little better.  Steven Thrasher, the Daniel H. Renberg Chair of social justice in reporting at Northwestern, who trashed a reporter who waited for the facts before reporting on a police shooting.

Of course, it is not just conservative speakers that the students want to ban. In 2021, they called for the removal of the President of the Board of Trustees. Despite being a major donor and supporter of the school, J. Landis Martin was denounced as a Republican who donated money to former President Donald Trump.

The university issued a statement that “This path forward requires the immediate removal of tents on Deering Meadow, cessation of non-approved use of amplified sound and a commitment that all conduct on Deering and across campus will comply with all University rules and policies. Compliant demonstration can continue at Deering Meadow through June 1.”

The university has long lacked the fortitude to stand up to students engaging in disruptive protests.

The danger of such passivity is evident on our campuses. As Henry David Thoreau warned, “all rivers and most corrupt men follow the path of least resistance.”

Here is the Northwestern agreement.

As expected, no change in rates from The Fed, and a hawkish bias to the language changes in the FOMC statement.

The bigger than expected QT taper news is noteworthy and Powell will have to explain why they are 'easing' this policy more than expected while inflation remains 'out of control'... and they are not ready to cut rates.

So now it's down to Powell to avoid a faux pas (as we detailed below) over shifts in The Fed's 'asymmetric' response function.

Watch Powell walk that tightrope live here (due to start at 1430ET):

*  *  *

As we detailed earlier, today's Fed meeting had the market feeling (and positioned for) “HAWKISHNESS,” especially after the ECI pile-on yesterday, which didn’t simply “upside surprise,” but re-accelerated to 1.2% after ending 2023 at 0.9%, and showing that persistent wage pressures further add to the risk of keeping inflation “too elevated” for the Fed.

However, according to Nomura MD Charlie McElligott, the largest risk with the Fed today is that there will be no summary of economic projections / no dot plots...

...meaning that outside of the usual statement, it will be Powell’s press conference alone that dictates market behavior... and the backtest on that is a bit dicey, with some historic faux pas in-sample.

He’s gotta find a way to “keep it in the pocket,” where his language simply must message “balance of risks”...

...which means (as we detailed earlier) that he dangerously must “toe the line” on widening out the Fed path away from currently asymmetric “when cut?”-messaging dating back to Dec ’23...

...and instead back to a two-way distribution with both ‘cut’ and honest-to-God ‘hike’ –optionality.

Nomura's rates guru Jonathan Cohn details just how narrow a path it is for Powell:

Powell’s FOMC presser and, in particular, his answer to the inevitable question around potential hikes represents a key risk.

Following meaningful policy path repricing since CPI and reorientation of Fedspeak, the bar for Powell to exceed market hawkishness is high.

Powell, pricing, positioning

What to expect

Statement:

Our economists expect two hawkish changes (see their preview here)

1. Change “inflation has eased over the past year, but remains elevated” to “inflation remains elevated”

2. Removal of “greater” in the Fed’s expectation that it would not ease rates “until it has greater confidence that inflation is moving sustainably toward 2%”

Presser:

• Powell’s FOMC presser will again be highly scrutinized, particularly his answer on whether hikes are in play. Bostic and Bowman flagged hikes as a risk and Williams did not rule them out, inviting a reassessment of two-way risk. Though Powell will likely maintain that policy is restrictive, he will also likely want to retain optionality amid high uncertainty around neutral. The phrasing of that optionality sentiment will be critical.

Is the market ready / priced?

• How much is priced: The market has repriced a lot, going from 63bp of cuts in 2024 pre-CPI to 28bp currently. Market-implied year-end rates for 2024 and 2025 are well above the median dots, granted the March dot plot had some ‘cuspy’ medians. The repricing owes primarily to sticky inflation arresting progress through H2 last year, though there has also clearly been a reduced ‘recession’ premium as well. In terms of hike appreciation, the market-implied probability of a hike by year-end is now around 15%, double what it was pre-CPI. Given the reorientation of Fedspeak amid this sticky inflation (i.e., less emphasis on cuts this year), there is a higher bar for Powell to exceed market hawkishness.

• Repositioning: At the front-end, there have been a couple waves of washouts in ‘sell hike’ trades like 1x2 payer spreads in the sell-off. An examination of open interest changes coupled with insights from our futures desk suggests a good deal of positioning post-CPI was rolled into lower strikes, not simply taken off. And with the increase in put OI in 94.625 (no cut) strike largely a function of buyers, those combining with sales in lower strikes (short skew) seem prepared for something like no cut or one hike scenario. Of course, the risk is that if Powell rhetoric around potential hikes is seen as hawkish and followed by strong NFP and CPI, we move quickly toward the low strikes as the market prices in a higher probability of multiple hikes and we get another positioning flush. I do think that if the Fed feels the need to change its directional bias and hike (not just stay on hold), one has to price in a high probability of multiple hikes, not a one and done. However, I still think there’s a very high bar for the Fed to pay more than lip service to open-mindedness.

QT slowdown

• The Fed is expected to announce a reduction in the pace of QT, likely to $30bn per month for UST. I wouldn’t expect much guidance on an end date. Slowing runoff should theoretically allow for a longer period of QT and lower ultimate level of reserves (thanks to more time for an efficient redistribution of liquidity) – a level around which uncertainty bands are very large.

Putting it together suggests a ‘middle of the road’ Powell can give way to a temporary relief rally, while a blundered characterization of hike optionality could lead to another position flush out and bear-flattening of the yield curve.

Hence, McElligott warns that with all this HAWKISH mentality / sentiment / positioning, the risk is that any surprisingly dovish Fed speak or Data (e.g. NFP Friday), you COULD see potential for an outsized SHORT SQUEEZE / RALLY RISK on stops.