BANK OF JAPAN HOLDS RATES AMID HIGH UNCERTAINTIES

First the U.S., then England, and now Japan. Everyone's hitting the brakes on interest rate hikes.

Today, Japan's central bank kept its rates steady, worried about unpredictable growth at home and worldwide. They're keeping short-term rates at -0.1% and aiming to keep their 10-year bond yield near zero. No surprises there.

But Japan stands out. While other big banks have upped rates to tackle rising inflation in recent years, Japan's keeping things super relaxed.

GRIT TAKE: Japan, the world's third-largest economy, is in a unique spot. Unlike most countries, it's chasing inflation after years of deflation. They're hoping for higher wages to boost spending, creating a positive loop for growth. But there's a shadow looming: stagflation. With the yen dropping 11% against the USD this year, Japan might end up importing more inflation than it bargained for. It's a delicate balance, and we'll need more data to get the full picture. Stay tuned.

BILL ACKMAN’S BIG SHORT

Bill Ackman, billionaire hedge fund tycoon said his firm remains short on bonds, especially the 30-year bonds, through “swaptions”. He says the world is in a different place and expects the long-term rates to rise from current levels.

But didn’t the FED just pause hiking – why would yields continue to go up?

He believes long-term rates are surprisingly too low. He says investors may have thought a 4% interest rate was high, given rates haven't breached this level for 15 years and locked in 4% for 30-year bonds. He believes that 5.5% is an appropriate yield for the 30-year Treasury. Due to long-term inflation (he doesn’t believe we will return to 2% as a baseline) plus the real rate of interest plus term premium.

Bill's Reasons for Rising Rates:

- Skyrocketing national debt, now at $33 trillion

- A flood of government bonds in the market – billion issued every week

- Foreign bondholders, like China, are offloading – not BUYING

- The real impact of quantitative tightening is yet to hit

- Outsourcing production to China no longer deflationary

- Workers and unions are gaining power, leading to more strikes and wage increases

- The "Peace Dividend" is fading. This refers to reducing defense spending and using the amount for other public purposes.

- Energy costs are surging.

- Not topping up the Strategic Petroleum Reserve is a dangerous mistake

- Higher gas prices will boost inflation expectations.

- The shift to EVs? "Incalculably expensive”

He ends his tweet with “But I could be wrong. Ai might save us”

GRIT TAKE: Bill Ackman is known for his bold predictions. While he's often on the mark (given his hedge fund's stature), he's had his misses too - remember the $1 billion Herbal Life debacle? That said, his points on interest rates have merit. My reservation? If the economy falters under these high rates and the FED feels compelled to cut, where does that leave us? It feels like we're navigating in the dark, unsure of our direction - a bit like Sandra Bullock in Birdbox. Eager to see Genevieve's strategy in action? Upgrade to PAID and dive into her daily BUYS & SELLS. 🚀📊

Coming Up…

TODAY: U.S. Manufacturing PMI

Next Week: Australia, Spain, Germany, Tokyo, Eurozone all report CPI’s and US PCE for August.

Headlines You Need To Know:

• Japan leaves rates unchanged on concerns of ‘extremely high uncertainties’

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Just for fun…

Wait, Henry Ford invented what?

You won’t BELIEVE what Henry Ford invented, that we all use, and no-it wasn’t a car. Ford Motors was producing 1 million model-T cars a year in 1919, and they were experiencing incredible success. However, each car was in need of about 100 feet of wood to be manufactured. Henry Ford was sick of dealing with third parties and wanted to produce his own wood. So he contacted his cousin’s husband, Edward G. Kingsford, a Michigan real estate agent, to help him find and purchase a sawmill. Ford was an avid outdoorsman that loved camping but encountered problems finding enough dry wood and kindling to build and sustain a fire that was hot enough to cook food over. Ford found that he could use the scraps and sawdust from the sawmill, pressed into lumps held together by tar and cornstarch, as a quick and easy way to start cooking a fire. He named this new invention: Charcoal and formed a company called Kingsford Charcoal. Kingsford Charcoal is still around today and does millions of dollars each year in revenue.

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