My Thoughts
Short-form commentary on macro, market structure, commodities, Bitcoin, crypto markets, and AI.
in the US, there's been a real estate bubble in the building since 1990's (pun intended). it was about to burst/de-leverage several times, but it was refueled via QE and government guarantees among others, thus delaying it
in the longer-term mortgage rates in the US will likely increase, but not because of interest rate cuts
in the longer-term mortgage rates in the US will likely increase, but not because of interest rate cuts
in fact, mortgage rates in the US have been on a downtrend for a while - way before the rate cut
the markets have also gradually priced-in the September for a while, as you could observe in FedFunds futures
current area is also a monthly support, upwards pressure is expected
in fact, mortgage rates in the US have been on a downtrend for a while - way before the rate cut
the markets have also gradually priced-in the September for a while, as you could observe in FedFunds futures
current area is also a monthly support, upwards pressure is expected
reducing the cost of capital by 25bps wouldn't affect mortgage that much - as it doesn't eliminate the existing risk in the market (i.e. existing mortgages)
to lower mortgage rates the Fed will likely do a mortgage-targeted QE, like with MBS in 2008 QE1
reducing the cost of capital by 25bps wouldn't affect mortgage that much - as it doesn't eliminate the existing risk in the market (i.e. existing mortgages)
to lower mortgage rates the Fed will likely do a mortgage-targeted QE, like with MBS in 2008 QE1
≈$39.6 is a great area to long silver during the pullback
similar to gold, there is also a strong support below, which will further fuel buying pressure
adapt the exact price to your ticker/derivative. chart below shows how to identify it (dashed line)
≈$3515 is a great price area to long gold during the pullback
you'll need to adjust the exact price to your ticker/derivative, but in the chart you can see how to find the relevant support (assuming your asset mirrors gold spot/futures)
and remember the strong support below
that 1 hour candle on gold 😂😂
and a new all time high within all that move
and there you go - the Fed cut the rates by 25 bps
there will NOT be a 50 bps rate cut
there is nothing to predict or speculate:
1. open FedWatch
2. observe
that's where institutions are hedging
30 day FedFunds futures implied target rate will NOT be wrong
you'll see in a bit 😉
there will NOT be a 50 bps rate cut
there is nothing to predict or speculate:
1. open FedWatch
2. observe
that's where institutions are hedging
30 day FedFunds futures implied target rate will NOT be wrong
you'll see in a bit 😉
what's up with the "urging" the Fed to cut by 50 bps today?
the rate cut is known NOW - and it will be no more & no less than 25 bps/0.25%. there is absolutely nothing to speculate about here
i assure you that your urges won't affect what the market already priced in 😄
these dynamics create an incentive for further upward price pressure:
➖ purchase prices raise due to low rates and ample financing
➖rent prices raise because purchase prices become too high
i've previously written an article about what makes real estate so special in terms of funding/re-funding capacity
banks finance ≈75% LTV on real estate purchases, and you can use existing properties as additional collateral
🧵read it here: https://illya.sh/threads/@1757632740-1.html
i've previously written an article about what makes real estate so special in terms of funding/re-funding capacity
banks finance ≈75% LTV on real estate purchases, and you can use existing properties as additional collateral
🧵read it here: https://illya.sh/threads/@1757632740-1.html
it's not just the Fed, the ECB is also lowering rates into higher inflation
this puts upwards pressure on both, real estate purchase and rent prices
so you can expect both - house prices and rents - to increase throughout the next 2 years
it's not just the Fed, the ECB is also lowering rates into higher inflation
this puts upwards pressure on both, real estate purchase and rent prices
so you can expect both - house prices and rents - to increase throughout the next 2 years
how will asset prices react to Fed's interest rate decision?
if the FOMC members suggest rates lower than in the June 2025 - expect an upwards rally in assets
if the FOMC members suggest higher or non-decreasing near future rates - expect a downward rally/profit taking in assets
during the Sept 17th 2025 FOMC meeting, the Fed will publish a new dot plot with the suggested interest rates for 2025, 2026, 2027 and longer-term
during the Sept 17th 2025 FOMC meeting, the Fed will publish a new dot plot with the suggested interest rates for 2025, 2026, 2027 and longer-term
so the most likely outcome is a 25bp/0.25% rate cut on September 17th 2025, and then at least one more cut in 2025
so the most likely outcome is a 25bp/0.25% rate cut on September 17th 2025, and then at least one more cut in 2025
a cut larger than 25bp is highly unlikely, since the current CME's 30 Day Federal Funds Futures price strongly implies a 4.0%-4.25% target rate
this is 25bp/0.25% below the current target rate of 4.25%-4.5%
a cut larger than 25bp is highly unlikely, since the current CME's 30 Day Federal Funds Futures price strongly implies a 4.0%-4.25% target rate
this is 25bp/0.25% below the current target rate of 4.25%-4.5%
based on the current Fed policy guidance available since June 2025, by the end of 2025 the Fed Funds rate should be ≈3.9%
current one is 4.25%-4.50%, so we either get a larger than 25bp cut or several rate cuts this year
based on the current Fed policy guidance available since June 2025, by the end of 2025 the Fed Funds rate should be ≈3.9%
current one is 4.25%-4.50%, so we either get a larger than 25bp cut or several rate cuts this year
watch the Fed's projection dot plot, not the Fed Funds rate
the 25bp/0.25% cut on September 17th 2025 will happen, and it's mostly priced in
it's the future interest rate policy guidance that can amplify a market move either way
watch the Fed's projection dot plot, not the Fed Funds rate
the 25bp/0.25% cut on September 17th 2025 will happen, and it's mostly priced in
it's the future interest rate policy guidance that can amplify a market move either way
👋 hello, $3700 gold
just as charted: with the yellow line resistance broken gold has risen over 6%
this thread covers the whole consolidation move, where i explained how it's a bullish precursor
the original goal of this thread was to follow gold until it breaks $3.5K, and now we're 0.15K above 😄
after ECB's realized gains are booked to PnL, the ECB splits up the net profit as:
➖ up to 20% to the general reserve fund, which can be used to offset future PnL losses
➖ the rest distributed to the NCB's, proportional to the National Central Bank's paid-up shares
thus, unrealized gold gains accumulate on the ECB's liability side, under the revaluation account, and the only way they can be debited (e.g. to cover expenses, or credit an NCB's reserve account) is:
1️⃣ when the ECB sells the gold, thus turning an unrealized gain into a realized one
2️⃣ offset future losses in the gold bucket
thus, unrealized gold gains accumulate on the ECB's liability side, under the revaluation account, and the only way they can be debited (e.g. to cover expenses, or credit an NCB's reserve account) is:
1️⃣ when the ECB sells the gold, thus turning an unrealized gain into a realized one
2️⃣ offset future losses in the gold bucket
this means the ECB can only use unrealized gold gains to cover/offset future unrealized losses on gold
these unrealized gains can neither offset an operational, nor a loss in another security bucket, such as FX
once a gain is realized, the corresponding proportion is debited to the revaluation account and credited to an income account/ booked to P&L
at the end of the year PnL is closed into equity by increasing equity reserves and/or NCB liabilities
this means the ECB can only use unrealized gold gains to cover/offset future unrealized losses on gold
these unrealized gains can neither offset an operational, nor a loss in another security bucket, such as FX
moreover, as per Eurosystem's accounting framework unrealized gains are non-distributable and may only offset future unrealized losses on the same item
moreover, as per Eurosystem's accounting framework unrealized gains are non-distributable and may only offset future unrealized losses on the same item
ECB's legal framework forbids the use of gold revaluation proceeds to pay expenses or operating losses
unrealized gains are not recognized as income and are instead credited to the revaluation account
revaluation account is under liability/equity on the ECB's balance sheet
