Feed the Beast
July 25, 2023
“They stab it with their steely knives, but they just can’t kill the beast”
Eagles – Hotel California
— I saw a post yesterday that said Federal Tax revenues are actually decreasing. Charts below are from St Louis Fed Fred website, showing a high of $3.2T collected in 2022 and less than $3T now. I believe these are nominal numbers, surprising in the context of high inflation and booming employment. The lower chart is the y/y percentage change, now negative. In fiscal year 2022 the Fed’l Gov’t spent $6.27T.
–Here’s a helpful and mesmerizing debt clock to help visualize US finances and growing deficits. We must feed the beast.
https://www.usdebtclock.org/
–We can always issue debt to cover the deficit. Get your FIVE-YEARS here! Today only! You want ’em, we got ’em. USU down half a point this morning to new recent low 125-20.
–Rate futures traded heavy yesterday with red SOFR contracts weakest. SFRZ3 9462.0 (-2.5) SFRZ4 9595.0 (red, -6.0), SFRZ5 9652.0 (green -5.0) and SFRZ6 9667.0 (blue, -2.5). Ten year yield rose 1.5 to 3.855%. 2/10 treasury spread approaching new lows at -105 in front of tomorrow’s FOMC. Financial press this morning is supporting the idea of further hikes, FT: Fed to signal it is not done yet… WSJ: Why the Fed Isn’t Ready to Declare Victory on Inflation. There is a press conference tomorrow, but no update to dot plot. Several commentators have recently mentioned the upcoming Jackson Hole Conference as a looming event for Powell’s future guidance, Takes place Aug 24-26.
–MSFT, GOOGL and Visa today.
–The line from Hotel California supposedly referenced Steely Dan (go ahead, look it up). So….
When Black Friday falls/You know it’s got to be/Don’t let it fall on me
https://fred.stlouisfed.org/series/W006RC1Q027SBEA
