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Fatal Attraction? Mind This ‘Very Tight Relationship’ In Volatility Risk Premia
With each passing escalation in the worsening dispute between the Trump administration and America's trade partners, market observers have been keen to try and divine something about relative vulnerability across assets.
Importantly, 2018 isn't just a trade story. Rather, the trade frictions have served to exacerbate some of the existing problems (e.g., tariffs have raised the prospect of higher domestic inflation in the U.S. at a time when the Fed is already hyper-sensitive to nascent signs of
Thanks – excellent post. One minor aside is the keenness with which folks in finance seem to want to link the potential for market turbulence that they’re rightly concerned about to a Fed pause. I reckon Powell’s pain threshold could be greater than theirs – but, again, Humphrey-Hawkins might shed some light.