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Rashad Ahmed
2,001 posts
Rashad Ahmed
@VARshad_
Joined October 2020
- Did China really sell $300B since 2021? Unlikely. The sharp rise in rates lowered UST valuations dramatically Much of the reported decline in China’s UST holdings reflects a drop in UST valuations, not sales. We can do a lot better by looking at the val-adjusted data 1/8"Maybe China is behind the rise in US long rates...China has fewer dollars to recycle into Treasuries. In fact, China has been selling $300bn in Treasuries since 2021, and the pace of Chinese selling has been faster in recent months," selling $40bn since April: Apollo's Slok
- Macro nerds: 3 reports released this week with important data & updates #EconTwitter#fintwit 1. WB commodities outlook: openknowledge.worldbank.org/bitstream/hand… 2. FSB global dollar funding: fsb.org/wp-content/upl… 3. BIS int'l banking and global liquidity: bis.org/statistics/rpp…
- Aggregate deposits can decline for a couple of reasons but deposit flight isn’t one of them. Deposit flight redistributes deposits but doesn't reduce them This fallacy is gaining momentum on Fintwit so let me offer a quick take on what drives aggregate bank deposits 1/12Since the Fed started raising rates, a record $870 billion of deposits have left US banks. This is by far the biggest deposit flight in US history and it’s not even close. That’s nearly $73 billion PER MONTH or $2.5 billion PER DAY. Needless to say, why keep your money in a
- Took 4+ years but glad to see all my PhD dissertation chapters published! Interested the global macro implications of monetary and financial shocks? CH1 tldr; US rates propagate to foreign rates differently in countries w managed floats Link:doi.org/10.1016/j.jimo… 1/3
- Do foreign yield curves help predict US recessions? It seems so: papers.ssrn.com/sol3/papers.cf… A short 🧵1/5 #EconTwitter#fintwit
- It’s hard to pin down a single reason explaining the ‘contradiction’ of a prolonged yield curve inversion + prevailing economic conditions Fwiw @UBS argues there are at least ten:
- Check out Figure 5 from @stevehouf's interesting paper: Larger supply of US Treasuries is significantly associated with higher bond yields when stock-bond correlations aren't negativeApparently some “gauge of bond term premium just turned positive for the first time since 2021”. Feels like it’s a good opportunity to share my PhD research from 2018, which I worked this “random topic” of what happens if the Fed unwinds its balance sheet. dropbox.com/s/h5jvh62vf8al…
- 1/x Are some banks no longer in an 'ample reserves' regime? Some data suggests bank funding is under pressure, a narrative recently picked up by the media. But it remains to be seen whether the narrative becomes problematic or not. Some thoughts/data..
- So glad to see this in print! Timely w debates over foreign demand for dollars, FX intervention risks and de-dollarization We shed light on a classic issue that while intuitive has traditionally been difficult to quantify: The effects of FX reserves on exchange rates 1/9
- Macro and finance nerds: IMF's global financial stability report just dropped and covers tons of recent market developments w/ great analytics, data etc link: imf.org/en/Publication…
- 1/x With 10s2s hitting -80bps, lots of talk on *deeper* inversions leading *deeper* recessions. But no evidence. So I ran the numbers and here's what I found (Tldr; the *size* of YC inversions don't matter for recession prediction. What matters: whether inversion occurs or not)The bond market seems to be signaling that the Fed is making a serious mistake. At -80 basis points (as measured by the 10 year vs 2 year Treasury yields), the yield curve is more inverted now than at any time since the early ‘80s when double-digit inflation was entrenched.
- 1/x With rates soaring and Fed QT, who's buying Treasuries? Foreign investors, US households and Hedge funds The just-released 2022Q3 quarterly flow of funds is lagged but valuable since it adjusts sector-specific asset flows for valuation changes - which have been huge
