Critical ‘Nuance’ On Fed Path

Critical ‘Nuance’ On Fed Path

In a sea of Fata Morganas, at least one trade was better than chasing ghosts. For weeks, equities and rates were more noise than signal, as a combination of systematic flows, short covering and stop-outs drove a July rally in stocks and bonds, which mainstream financial media outlets dutifully narrated with retrofitted market wraps purporting to explain the price action. Such efforts were frustrated by recession fears, a somewhat ambiguous Q2 earnings season and the pitfalls of belabored attem
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4 thoughts on “Critical ‘Nuance’ On Fed Path

  1. It sure looks as if the market is “sold out”. You have to wonder just where further large-scale investor selling will come from. What trees still need to be shaken?

    That may well be “Pre-Pivot” logic though, given the Fed’s targeting of asset prices. Thus our stupid obsessing over Fed utterances.

  2. Fed-wise I generally take all chatter beyond the next meeting with a grain of salt. Those expecting cuts in 2023 are living in an alternate reality imho…the exception of course is if the current Fed overdoes it and bludgeons the fledgling economy…my biggest hope remains Janet Yellen and her sway with Powell to help him and the committee be the adults in the room cause headline inflation not coming down dramatically and significantly while Putin continues his inhumane assault in Ukraine…my two cents …

  3. So now the gang that previously couldn’t shoot straight is going to reel off a series of bullseyes?  Keeping my pile shaded over to the side of liquidity becoming even more of an issue as the monetary regime continues to transition, and possibly something breaking.

    One thing seems for sure — the market no longer responds much to broad developments that are not specific to the market.  Maybe this is a consequence of chronic vol suppression, but this hamster remembers when the market might actually respond to things like a domestic insurrection, Russia invading Ukraine, or China war gaming all around Taiwan.  But it increasingly seems like the market looks right through these headlines to focus on the second order effects on prices, inflation, international trade flows and various “scientific” measurements what is happening.  I guess capitalism keeps capitalizing even when the democracy it is founded upon is badly stumbling.  

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