G* meeting today and tomorrow. US May CPI .6% , core at .2%. Yoy 4.2 % and 2.3% respectively.
Theory-Interest rates are going up, but money supply is also going to increase and Fed Liquidity is about to kick into high gear.
If interest rates go up, US financial institutions will be under margin pressure. The Yield curve has flattened significantly ( Two 3+ sigma events took place in the last 2 weeks) Hedge funds and levered money is in the cross hairs of the Central Banks. Central Planners are trying to regain control of the elements. The battle rages.
This theory is a twist on the Greenspan doctrine-print money at low interest rates and allow anybody to build anything and that creates intense competition-witness the automakers and airlines.
Energy prices are too high for the avg US citizen-demand has dropped. Question is will they fall or just stop going up.
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