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Stock Bulls Don Blinders As Rates Explode
Even after the worst week for US equities since early December, it'd be hard to call bears "vindicated."
Given the general tenor of my recent commentary, I suppose I'm a "bear," although I'd suggest any efforts to put a label on my daily editorializing belie my general indifference to near-term market direction.
The question continues to be whether stocks have truly internalized the dramatic shift in Fed expectations.
The terminal rate rethink triggered by January's NFP fastball was a game-
H-Man, in the camp. 5% with no risk is just to rich to ignore when compared to equity headwind risk.
This is probably a beginner’s question but how do you figure out the expected terminal rate ? From the Eurodollar curve ?
Thanks
Fed-dated swaps or Fed funds futures (the latter is probably easier if you’re not used to doing this).