By David Enna, Tipswatch.com
Long-time readers of this site know what that headline means: I am on the move. Over the next 3+ weeks I will be traveling “Down Under.” That’s Australia, the continent with more than 20 creatures – sharks, crocs, snakes, spiders and even jumping ants — that can kill you in less than 20 minutes.
I will try hard to avoid all that danger and head toward the slightly-drunk creatures like koalas.
Some of the time, especially early in the trip, I will be in remote areas of Tasmania and central Australia. I may not have an internet connection. I will attempt to keep up with financial news and reading & answering your comments, but no promises. Expect delays. My article updates will be spotty and ill-timed.
What’s ahead
Keep in mind that eastern Australia is 16 hours ahead of Eastern Standard Time and places like Alice Springs seem off the rails — 14 1/2 hours ahead of ET. I plan to be confused.
Wednesday, Feb. 11. The Bureau of Labor Statistics will release the January inflation report (assuming we do not have a prolonged government shutdown) at 8:30 a.m. ET. I should be in Melbourne on that day, where it will be Thursday 12:30 a.m. My inflation analysis is going to be posted late.
I think this will be an interesting and important CPI report because it should start to clarify things as we emerge from the fog of last year’s government shutdown, when no inflation data were collected in October.
Sunday, Feb. 15. I plan to post a preview of the auction of a 30-year Treasury Inflation-Protected Security coming Thursday, Feb. 19. I should have no problem getting that up at 8 a.m. Sunday ET.
Generally, my articles about 30-year TIPS draw the smallest audiences of the year, but this auction should legitimately interest people building very long-term ladders of TIPS investments. The real yield could top 2.50%.
Thursday, Feb. 19. The 30-year TIPS auction closes at 1 p.m. ET. I will be on the coast of northeastern Australia, 16 hours ahead of ET, where it will be 5 a.m. Friday. Again, I will be late posting this news.
Wild cards?
My greatest fear is that TreasuryDirect will announce its long-hinted sweeping changes while I am on an extended trip. Or we will get a major market-moving moment, like a sudden announcement of 2,000% tariffs on Europe. I’ll be paying attention as much as I can.
In other news
President Trump announced Friday he is choosing Kevin Warsh to be the next chairman of the Federal Reserve. In his Truth Social post, he included an apparent compliment on Warsh’s good looks:
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best. On top of everything else, he is ‘central casting,’ and he will never let you down.”
Warsh is currently an adviser at Stanley Druckenmiller’s Duquesne Family Office, a fellow at the conservative Hoover Institution think tank and a lecturer at Stanford Business School.
This appears to be a good choice. Warsh, 55, served on the central bank’s Board of Governors from 2006 to 2011. While he has been known as an “inflation hawk” in the past, he has joined Trump this year in arguing for lower interest rates. The Wall Street Journal has called him “the conventional choice” and the selection should be greeted positively by stock and bond markets.
The announcement caused the price of gold to fall 10% on Friday, and silver, 20%. Investors in those metals had been betting on a decline in Fed independence and the potential for high inflation. The declines seem, in a way, to be an endorsement for Warsh.
He may face trouble getting Senate approval — but not because of his experience or views. Sen Thom Tillis and other Republicans are threatening to hold up Fed appointments until the potential criminal investigation of current Fed chair Jerome Powell is cleared.
Will Jerome Powell stay on at the Fed after his term as chairman ends? I doubt it. The man looks tired and worn after years of guiding this mighty central bank. For the most part, he deserves credit for doing very good work (my opinion).
I was a Powell critic in the years of aggressive bond-buying by the Fed and ultra-low interest rates, but I respect that he did stand fast in the next phase: an epic battle with 40-year-high inflation, that yes, he helped to cause. Powell and the Fed learned a harsh lesson that inflation remains a risk.
On Wednesday, Powell’s words of advice for the next chair were: “Stay out of elected politics, don’t get pulled into elected politics. Don’t do it.” Excellent advice.
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
