Higher Rates = Higher Dollar

MARKET UPDATE

Jackson Hole

• Higher even if it does some damage.

The Federal Reserve must continue raising interest rates AND

• HOLD them at a higher level

• UNTIL it is confident inflation is under control

• EVEN IF unemployment rises

Even though Powell attempted to talk down rate cuts in 2023 the rate market continues to imply rate cuts starting around June 2023 timeframe maybe modestly less cuts than before   

10yr       3.1%

U.S. 2- year Treasury

• At its highest point since November 2007

The 2-10 US curve

• continues to be fairly inverted at negative 34

• The low was negative 52 on August 9, 2022

Powell said:

• The road ahead will bring some pain to households and businesses

• An unfortunate cost of bring down inflation.

• Higher for longer rates means a Strong U.S. Dollar

US$        108.5     Approaching new highs of 109 set August 22, 2022

Crude    94           +1%

Most commodities are down except oil and corn because you can’t predict what Putin will do

• Copper                 -3%

• Lumber                -5%

• Iron Ore               -1%

Netflix NFLX

• Bloomberg reporting $7-9 per month price tag for Ad-supported new service

• Ad-supported product to launch between October to December 2022 in 6 different markets

• Global rollout in early 2023

Earnings               None

CRYPTO UPDATE

September = worst month for Bitcoin BTC/USD historically

• Average return (9 years) = -7.6%

• Closed month lower 75% of the time

Crypto relative strength

• Altcoins leading

• But outperformance weakened during sell-off