The Neo-Chartalists

The 10 year TIP b/e moved out to 2.08+ last week. The talk of further Fed action was brisk. Q4 estimates for GDP are in the low to mid 3s. Real foreign Treasury selling continued according to Fed official data.

If the rising popularity of the neo-chartalists, often called MMT, has led to discussions of NGDP targeting. Based on present inputs that number is 5.5%. Nominal growth targets approaching 7 would set the Fed haters on fire and put Ron Paul in a clinic.

Away from the debate, futures prices for LIBOR sets have risen (implied yield down) nearly 20 bps since 12/23. We still see fair value between 99.42 and 99.45 for June. Term structures are slightly positive.

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