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In Rates: ‘Imminent And Enormous Short-Squeeze Risk’
"Simply put, this fattens the right-tail of the US economic soft landing scenario," Nomura's Charlie McElligott said Wednesday.
He was referring, of course, to Chris Waller's market-moving remarks on Tuesday, when the born-again hawk and Committee bellwether expressed "confidence" that policy is sufficiently restrictive to return inflation to target, before sketching a tentative timeline on insurance cuts ("three months, four months or five months").
As I emphasized in Tuesday evening's Daily,
flows and risk management – my favorite market elements … let’s assume Charlie’s short squeeze completes with all the noise expected, what comes next? Not that I’m trying to front run it, but as a thought exercise … interesting. That’s enough money to matter somewhere it seems ($70b).