Everyone is at the beach

Wrap

The markets seemed to sleep today. Generally, the tone was bullish/risk-on: bonds sagged almost across the board, presumably indicating that there is a consensus that inflation is coming down. The odd exception was crypto, which sagged quite badly. I heard a theory on the Macro Trading Floor podcast (the Macro Alf and Steno Larsen show) that crypto wasn’t really an inflation hedge, but was inversely correlated, in terms of price, relative to narrow money (which, in a Friedmanite world, would be correlated with inflation). With the Fed, belatedly and tentatively, starting to sell of mortgage backed securities and Treasury bills, this is going to be bearish for crypto. Nothing I say is remotely intended to be investment advice, but this is exceptionally true for crypto, which seems to be a market infested with scammers, sharks and Ponzi schemes.