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Market Volatility and Tech Leadership
- Bond market volatility is expanding, impacting rate and inflation expectations.
- Tech stocks, like brokers, semiconductors, and social media, have regained market leadership after a massive reduction in rate expectations.
Global Liquidity and SVB's Failure
- Silicon Valley Bank's (SVB) failure is a consequence of very low global liquidity, but the Federal Reserve is actively supporting the system.
- The key takeaway is not just SVB's collapse, but the broader implications of the British gilt market crisis in September 2022.
Bond Volatility and Central Bank Actions
- Bond volatility is critical for creating liquidity because it affects collateral in the funding system.
- Every central bank prioritizes controlling its sovereign bond market, as seen in the Bank of Japan and Bank of England's recent actions.