Powell pumps stocks and admits government lies about jobs data
CPI becomes less a concern for the Fed, but not enough to move policy. Stocks hit another all-time high.
Dear Readers,
Greetings from Alaska! On the flight up from Los Angeles, I cracked open the 1986 book recommended to me by our liquidity mentor Michael Howell—Interest Rates, the Markets, and the New Financial World by Howell’s own mentor Henry Kaufman. Kaufman worked in banking, then for the Fed, then became partner at the investment bank Salomon Brothers.
While essentially finished with my research for book 2 (aiming for a Fall 2024 release), I was hesitant to start another book that might influence my book writing, but in the end I couldn’t help it. Readers know that I’m in the process of deconstructing Howell’s liquidity model for our own and your benefit, so I figured a book by his mentor should be good enough. I’ll leave you with this thought before we cover yesterday’s inflation report and Fed decision, only to revisit it before we conclude today’s letter. It felt surreally important given the recent wave of excitement surrounding replacing the current administration with a more bitcoin-friendly one:
Like no other official document, the federal budget reveals our economic morality, our willingness to accept discipline, and our capacity to respond quickly to changing financial and economic conditions. The budget, set through the democratic process, says more about this nation, and what conditions it will tolerate, than any other measure.
-Henry Kaufman, 1986
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Today’s topics
CPI wrap
Powell has spoken about rents falling for months
The US government is lying to you, and apparently Powell is aware
Globally coordinated cuts are still happening
Treasury prices supported to weaken the dollar
All-time highs in stocks are the most obvious signpost
Bitcoin will eventually follow stocks
Ethereum is still on death watch
My thoughts on Donald Trump
Personal share
I couldn’t help but share this moment with you. My family and I are taking a few days in the 49th state to celebrate the end of the elementary school year and connect with nature. And did we ever today. Owing it all to a higher power, we were able to spot two separate pods of orcas and a pair of humpback whales engaging in some awe-inspiring surface feeding. Here is a clip of the second pod we witnessed—seven orcas peacefully patrolling Kenai Fjord. A moment to remember forever for my wife, daughter, and I:
CPI is stabilizing, for real this time
With both CPI and FOMC occurring on the same day, there was little doubt that Wednesday would move markets. Wednesday did not disappoint.