FED says more rate hikes...data says pivot sooner than we thought

The system is a spider web that has an infinite amount of derivatives that make it whole....the bottom half of this screen capture functions as the RSI for the Reverse Repo. Note that the FED just paused at the exact point that the RSI reached its lowest point, back in September. It should be evident enough that they are shifting their monetary policy.

The Reverse Repo functions as a "storage facility" where the party  executing the reverse repo (the FED) sells assets to the other party (the banks) while agreeing to buy them back later at a slightly higher price. 

A rising Reverse Repo trends parallel with higher interest rates and rising bond yields, because it is a mechanism that shrinks the money supply...a.k.a. more dollars chasing a lesser amount of goods, and this causes the DXY (the relative strength of the US Dollar) to rise. Higher Bond Yields and a higher DXY equals a higher MMRI (Mannarino Market Risk Indictor) which signals higher risk in the market. 

When the Reverse Repo falls, it is signaling that the FED is beginning to shift its monetary policy, even though it might not be immediately...the last time the FED paused rates was in 2019, as Bond Yields became suppressed, alongside a falling Reverse Repo (expanding the money supply/lowering the DXY). Then at the next FED meeting, they announced a pivot...and the Reverse Repo fell back down to stagnate around 0%.

Right now, the Overnight Reverse Repo has been dropping fast, sending its RSI to the lowest point dating back to 2008 (the beginning of the Reverse Repo Market), simultaneously at the same time that the FED paused rates in September. 

The data suggests that the FED will either pause or pivot next meeting, but no more rate hikes for the foreseeable future. There is a great probability that rates might be paused for some time, instead of a pivot, but a pivot will be inevitable...and we could see the MMRI fall at a rapid pace.

Does this scenario sound familiar?

It should, and this is because the series of events outlined above took place right before the Pandemic Crash of 2020. The crash of 2020 was designed for one purpose only…so the Central Banks could hyperinflate the debt market, their balance sheet, and the stock market. In my opinion, what we are witnessing right now is the beginning of another crisis, and by following what is happening above, it will allow us to see it unfold before it happens.

The FED isn’t done hyperinflating.

They are allowing risk to rise, so they can buy it all (again).