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Wait, What?

If you don't have a sense of humor, the market's reaction to the Fed minutes was probably pretty frustrating for you. 

If you don't have a sense of humor, the market's reaction to the Fed minutes was probably pretty frustrating for you. 
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6 comments on “Wait, What?

  1. To tell the truth, which I rarely do, I was shocked by the spike in the S&P while the 10 yr was in the dumps. Went out to buy some tenderloin steaks from my favorite butcher and it looks like it all worked out. Time heals all wounds.

  2. Can someone explain the following portion of the quote from Dominic Konstam in the article: “. . . a more aggressive rise in real rates will likely reduce risk neutral rates, which is negative for equities.” Aren’t low risk neutral rights part of what has been positive for the present value of equities? Thanks.

    • I beieve what is meant there specifically is lower risk-neutral growth rates. Could be wrong as I don’t recall the quote. But the way to understand this in 10 words is higher real rates = higher discount rates = lower equity valuations. Then add in the notion of capital flows from equities to bonds and you have a good starting point.

  3. “make sure you know what you’re doing before you charge out and try to trade on Fed minutes“

    Ain’t that the truth. In a purely amateur moment, I squandered 2 weeks of profits from my futures trading portfolio today. Seems like in an elevated vol environment, ride the build up, hedge, and fade the move.

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