December 21, 2021

I’m going to say that the new “norm” for short term interest rates is going to be somewhere in the 2%-3% range for LIBOR, which incidentally, would imply the USA Fed Funds Rate (what the Fed sets) therefore having something like a 1 3/4% to 2 3/4% range.

As an example, and this might be simplistic, but on the chart below, when I look at where rates were in the pre-Covid years, I can only think that those levels ARE easily representative of what the norm WILL be for the next 3-4 years…

And going one step further, when I look at where June 2022 Eurodollars are today, all I continue to think is, “The move JUST STARTED.”

Hitting 98.50 by next summer would mean 1.50% LIBOR…and maybe 1.25% Fed Funds…neither of which is going to come anywhere close to slowing anything down…whether you’re talking the economy or inflation.

At some point, somebody at the Fed is going to say, “We KNOW we’re raising rates…so WHY should we wait to begin doing it?”

I CONTINUE TO RECOMMEND BUYING JUNE 2022 PUTS…HERE AND NOW.

Here is the put option I’d recommend here…

Call if you’re interested. Again, it’s NOT to late to get on…or to add to existing positions.

Thanks,

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars