The yield curve recovered 98 basis points in the last week to close at 5488 on Nov 18.
Despite all the alarming volatility in US Treasuries, the curve is little changed from Oct 28 at 5487 or Oct 19 at 5486, one month ago.
The upward trend remains intact. Raising the Fed Funds rate to 3.83% has produced an overall yield curve at 4.22%.
There's plenty more to be done.
The lying rhetoric is designed to persuade the Fed to halt ("You've done enough!"), enlisting as many dupes along the way as it can to join the chorus, since easy money is the industry's goose that laid the golden egg.
But easy money is why this country is $31 trillion in debt, and why inflation is raging at an average of 8.3% in the first half of 2022.
Since March foreigners have held $300 billion less of the stuff on net through September, which is not a good sign.
But consider that there's about $2.9 trillion in US Treasury notes issued in 2020 alone paying just 0.6% on average and maybe you can understand why.
Meanwhile investors holding bonds are down 30.95% year to date (TLT) at the same time the S&P 500 is down 17.33%. A total bond index like VTSAX is down less, 16.92% year to date, which is cold comfort.
But that's not the Fed's biggest problem.
The Fed's biggest problem remains the so-called "dual mandate", to maintain stable prices AND full employment at the same time.
Our disgusting Congress foisted the latter on the Fed in 1978, which was nothing but a damned if you do, damned if you don't abdication of its own political responsibility dumped onto the appointee of the executive.
But the disgusting Congress represents the disgusting people, who want tax cuts AND infrastructure spending at the same time.
The dual mandate didn't stop Paul Volcker from doing what needed to be done to subdue inflation from 1979, but those were different times when the political tables were the reverse. Volcker was a Democrat appointee saddling a new Republican president with an unemployment rate of 9.7% by jacking up the cost of money.
Jay Powell is a Republican appointee who will have to do the same to a Democrat president to end the current madness.
The pressure on him to relent comes from every quarter.
We'll see if the new Republican House has the cojones to back him, which it should if it gives a fig about the future of the country.
But Jay Powell will have to prove that he has the cojones first, because the Congress is full of girly men.
He has hardly begun to fight.
