How the Fed Stole Christmas


My annual tribute to the markets around the holiday’s tweaked slightly for 2018.  Amazing how much of it still applies 4 years later…

‘Twas the night before Christmas, when all thro’ the house,

The Markets were stirring, bonds were aroused

The Fed dropped the hammer, rates started soaring,
Oh wait, no – they’re actually snoring;
The pundits were sparring, ’bout grandeur and dread,

While visions of recovery danc’d in their heads,
And Powell on the hot seat, with rate hikes on tap,
Had low rates been settled for a long winter’s nap?
When out in markets there arose such a clatter,
Bond traders said hey wait, let’s look at the data!

So yields went the other way in a quick flash,
Dropped below 2.80, a big green hulk smash.
The range stayed the range, as it has for some time,
Rates didn’t jump, the result was sublime;
When, what to my wondering eyes should appear,
Rate have been rallying, borrowers had nothing to fear,

With trading in holiday mode, not so lively and quick,
Instead of flashing lights, we get a few ticks.
More rapid than rate hikes the answers they came,
Powell whistled, and shouted, and call’d them by name:

“New! normal, new! Job starts, new! products, and spending,
“On! Rate Hikes, on! Tightening, Stop shouting and dissing;
“To the top of the charts! Go out to the mall!
“Now spend away! Spend away! Spend away all!”

So is the great bond rally done? Should we even ask why?
When rates meet with this obstacle, should they sink or fly?
Another year in the books, time indeed flew,
With the sleigh full of app drops – Oh boy, Oh boo hoo.
With higher bond yields, closings went poof
Borrowers and Lenders all shouted ooof!

As markets meandered and twisted, they spiraled around,
With soaring expenses, came reality with a bound:
Instead of dressing in fur, from our head to our feet,
Or eating lobster and caviar or even prime meat;
Lenders hunkered down a bit, as applications contracted,
PB&J and puddings, brown bagged lunches were pack-ed:
Apple is struggling! Still better than Blackberry
Microsoft is surging, oil’s almost buried;
Yachts, and G4s, cars wrapped in bows,
All the Fed’s money still missed main street, OH NO!!

Lining the pockets of big companies and Wall Street,
Not helping the masses, the plan’s incomplete.
They had good intentions, albeit misdirected
Now markets, the wealth gap and expectations’r disconnected!
They talk’bout dual mandates, jobs and inflation,
Playing with the future of a once powerful nation;
A wink of their eye and jab of the elbow,

When will their plans work and the economy really go?

Let’s be realistic though, maybe things aren’t so bad,
We’re still a free country, the new iPhone is rad!
Cell phones and satellites, watches that talk,
Boards that we ride on, no need to walk : /

Flat Screens and tablets, the web’s everywhere,
Nose jobs and waist training, even surgically replaced hair!
So let’s keep looking forward, aspire to greater heights,
Happy Christmas to all, and to all a good night.


It’s a few days early, but Merry Christmas and happy holidays everyone.

-Philip Mancuso

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