‘Incredibly Uncomfortable’ Fed Hawks Circle Summer Stock Rally
"The Fed is in an incredibly uncomfortable position," Nomura's Charlie McElligott said Tuesday, amid a spate of soundbites from policymakers committing and recommitting to an inflation fight they're either winning or losing depending on what metric you choose to consult. The curve bear flattened and market pricing for the September meeting firmed after Mary Daly declared the Fed "nowhere near almost done." Daly's deliberately redundant phraseology was a hawkish version of Jerome Powell's "not
3 thoughts on “‘Incredibly Uncomfortable’ Fed Hawks Circle Summer Stock Rally”
From the verbiage coming out of the Fed Governors and Regional bank Presidents, you would have to believe that they are going another 100 bps or more by year end. This is going to end really badly.
I agree, I am of the opinion that the Fed has been so successful in its efforts to bring about a recession that its forcing down rates. I think this view can also be partially be supported by the fall in oil prices, which have almost become a proxy for growth or the lack of it. In turn this resulted in an initial rally in equities that caused shorts to be unwound and we are now seeing all the various systematic strategies increasing their net exposures.
H-Man, in your other post you mention even Marko K sees another 100 bps by the fed before year end but he suggests that may be enough to clear the air for equities. The problem that seems to have no solution is how do you bring down the labor input without putting the economy into a tailspin?