05072021 :: Friday finance

A partial digest

Philip Valenta, MSF
HedgeHound

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The current US administration is entering a predicament phase, facing the conundrum of seeking to spend more without the comfort of knowing that it can easily borrow more to do so. Apparently Treasury has been doing things in a certain way to avoid hitting the debt ceiling, but it’s capacity to do that may be coming to an end in the summer timeframe, says Yellen.

Earlier in the week, Yellen walked back remarks about an impending recovery and rates rising accordingly. For their part, PIMCO and Goldman Sachs think the recovery and inflation, or reflation, trade, and any subsequent raising of rates by the Fed, is overblown. Rather, the Fed is likely to stay the current course for a while.

What’s happening in India is emanating to neighboring nations like Sri Lanka, Nepal, and Indonesia. Bangladesh and South Africa count among the nations that have just now detected the India variant, B.1.617, inside of their borders. The possibility exists that, as before, the wave spreads further and engulfs nations everywhere, including the US, once again. India is, after all, the second most populous country in the entire world, and its peoples have dealings everywhere. Things don’t have to go any differently than how the pandemic began.

Variant B.1.617 is believed to be more transmissible and possibly more virulent. There is also a chance that it evades the protection of current vaccines. As it continues to spread within India and elsewhere, more mutations are in the cards…

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