Powell Less Hawkish… Threading a Fine NeedleThe Fed assured investors today that they will only raise rates 25 bps in March. However, they remain well 'behind the curve' on inflation... which could prove costly
Fasten Your Seat Belts…Get ready for a lot more volatility. In short, "more Fed will equal more vol". Rate hikes are coming... only question is how many and how fast...
Thoughts on ’22 with 5 ChartsThis post looks at what I think will be the most important (or influential) charts for this year. Spoiler alert: much of this centers on crude oil, inflation, rates and of course the Fed...
Relief Rally on ‘Expected’ Fed MoveThe Fed's $1.44T QE program is going to end in a few months. Great news... but I would argue 6-9 months too late. They caused a bubble in speculative assets (which will bust) - not to mention stoking dangerous levels of unwanted inflation.
It’s All About the Fed… Nothing has a greater impact on financial risk assets than the availability of liquidity and its price. Rate hikes are coming - it's just how many and how fast?
Hot CPI Priced In… But are 3 Rate Hikes for ’22?Friday we learned US CPI hit 6.8% year-on-year for the month of November. Here's the thing: there is an entire generation of people have never experienced 'sticker shock' like this in their adult lives.
Powell’s Pivot… As Market Frets over OmicronHow quickly things can change. From the Fed pivoting on its dovish sentiment... to the 'Omicron' variant arriving in California. This has seen the market turn on a dime.
Is this 40-Year Inflation Trend Over? When it comes to inflation, I continue to pay attention to the 5-Year, 5-Year Forward expectations... which trade at a very modest 2.33%. And whilst inflationary pressure will not ease a great deal over the coming 12+ months (maybe longer) - beyond that the market sees mean reversion.
Fed Gives ‘Green Light’ to SpeculatorsYesterday my closing comment was "... my feeling is the Fed will not want to knock equities off balance". True to form - they didn't. The most dovish Fed President in history delivered exactly the words the market wanted to hear. i.e., the tab remains open.
The RBA’s Dilemma… When Things Go WrongThis week we will hear from the Fed on monetary policy...They're expected to not only announce imminent plans to reduce their $120B monthly bond purchases (as early as November) - but are likely to shed more light on their timing of rate rises.
