‘It’s Now Crystal Clear’ That Policymakers Are Panicking: McElligott

‘It’s Now Crystal Clear’ That Policymakers Are Panicking: McElligott

There's a "light at the end of the tunnel." That's according to Nomura's Charlie McElligott, who on Tuesday flagged "obvious signs of capitulatory 'panic' and mounting destabilization forcing authorities and central banks to change the rules mid-game and push back against the impacts of 'too much' tightening." The notion that markets stop panicking when policymakers start panicking is now working in favor of risk sentiment as recent events suggest officials are indeed getting worried. "It's no
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7 thoughts on “‘It’s Now Crystal Clear’ That Policymakers Are Panicking: McElligott

  1. H’s article incorporating JOLTS commentary (which I’m sure he’s penning as we speak) will be interesting. The market has already had its say, of course. To me the key is that the plunge in JOLTS openings is forward looking, the next CPI print is backward looking, and Fed policy is clearly starting to kick in fundamentally. Still need to see what NFP says, but I suspect the market is a bit wrong-footed here to the downside until it becomes more clear how the expected, and partially priced in, recession should be reflected.

  2. A couple of days going up doesn’t mean we are out of the woods. I still think that we will be going down to the 3300 – 3400 area in the SP500. Yes, raising rates does reduce demand but I don’t think it will lower demand enough for the Fed to pivot. I agree with H that the market will expect the Fed to change the amount of increase to maybe 0.5, but with the unemployment rate still as low as it is and with the CPI as high as it is I don’t think the conditions are going in the direction the Fed wants, for them to change direction.

  3. H-Man, sticky inflation is sticky inflation. OPEC oil cuts makes more sticky inflation. While hope abounds about the light at the end of tunnel, I am not sure we are even in the tunnel but if we are it is a very long tunnel. But hope springs eternal.

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