From Joe
Hey All,
I'm going to be hosting a free online event in 2 weeks to discuss a few unprecedented things happening in our financial system right now. The government has recently experienced record levels of bad treasury auctions. The Federal Reserve is caught trying to beat inflation, while not triggering a death spiral.
I'll be putting this all in context with the Fed's interest rate and balance sheet policy, and how it plays into the longer term debt cycle. And of course, talking about how to profit from it all.
It's completely free, but there are only 500 slots available. March 7th, Sign up here: https://go.heresy.financial/register
News
Fed's Waller sees 'no rush' to cut interest rates
U.S. Federal Reserve policymakers should delay interest rate cuts by at least another couple more months to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road, Fed Governor Christopher Waller said on Thursday. Core consumer prices rose 0.4% in January from a month earlier, well above the pace consistent with the Fed's 2% annual inflation goal. That, along with a 3.3% annualized increase in fourth-quarter GDP and the more than 350,000 jobs added to the U.S. economy in January, "has reinforced my view that we need to verify that the progress on inflation we saw in the last half of 2023 will continue and this means there is no rush to begin cutting interest rates to normalize monetary policy," Waller said in remarks prepared for delivery in Minneapolis.
Private Credit Moves Into Banks’ Infrastructure Lending Turf
Global demand for new infrastructure to service everything from clean energy to data has created a lucrative new market for some of the biggest names in private credit. Investors including Blackstone Inc, Brookfield Asset Management Ltd and Ares Management Corp raised almost $9 billion last year for funds that will be used to finance infrastructure projects. The market has the potential to grow to $1.5 trillion, according to a white paper published by Ares on Tuesday based on an extrapolation of 2022 data over a five-year time horizon.
China’s Property Foreclosures Surge as Growth Slows
The number of foreclosed properties for sale in China rose at a faster pace in January, in a sign of the country’s continued economic slowdown. New listings of foreclosed properties nationwide rose 48% in January from a year earlier, compared with 37% in 2023, according to a report by real estate agency China Index Holdings published Thursday. The 100,400 properties listed for sale last month include residential, commercial and industrial real estate. Transactions in January also rose about 18% on-year. China’s economic downturn has resulted in a growing number of debt-saddled property owners who are forced to sell, especially as real estate loans account for a large majority of the country’s non-performing debt.
ECB Posts Its First Loss Since 2004 After Barrage of Rate Hikes
The European Central Bank recorded its first loss in two decades following an unprecedented ramp-up in borrowing costs to tackle inflation. The shortfall for 2023 — even after the full release of €6.6 billion ($7.2 billion) in risk provisions — totaled €1.27 billion, as rising interest rates increased the cost of past stimulus efforts. While the ECB also warned of negative results “over the next few years,” it said this won’t impede its operations. “The loss, which followed almost two decades of substantial profits, reflects the role and necessary policy actions of the Eurosystem in fulfilling its primary mandate of maintaining price stability and has no impact on its ability to conduct effective monetary policy,” the ECB said in a statement on Thursday.