Bond markets are changing their views on Fed policy based on the high frequency data, seemingly unaware that the major variable the Fed is watching is the bond markets themselves. After the funding panic of last September and the regional bank wobble last March, the twin architects of US monetary policy (the Fed is now joined by the Treasury) are focussing on Bond Market stability as their primary aim. Politicians meanwhile, having seen how the bond markets ended the administration of UK Premier Liz Truss in September 2022 are keenly aware that it is not just "the Economy stupid", but the Economy and the markets that they need to manage the narrative for both voters and markets. They all need a form of Goldilocks - either good or bad, but not so good or so bad as to trigger either the markets to sell off or the authorities to react. Investors, meanwhile, conscious of the precarious balancing act Goldilocks requires, are increasingly looking at Gold.

The recent spike in Gold has baffled many, but brings together medium term risk management concerns by Central Banks to move away from the $ and investor concerns over the inflationary aspects and oversupply of Treasuries associated with US Fiscal Policy. Gold, and cash are the new risk off assets. The proximate near term cause may be an apparent move by US Banks to get exemption to fund a lucrative carry trade in Treasuries, but this back Door QE is making macro traders nervous and looks to be linking Bitcoin enthusiasts with fellow $ catastrophists in the Gold market - offering BOLD, a new blend of Bitcoin and Gold as the new 60;40 fund.