Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
Gut Check Arrives For Stock Rally In Brutal Rates Repricing
So, no June rate cut from the Fed. A move at the next SEP meeting was already looking unlikely. Wednesday's CPI report all but ruled it out.
Maybe a June cut was always a fantasy. The US economy has a lot of underlying momentum, after all. Too much, probably, for services sector price growth to cool any further.
Now that the data has thoroughly disabused policymakers of their dovish daydreams, it's worth recalling that at one point early this year, a March cut was almost fully priced. Fast for
I benefit from this color provided here regarding CPI print. While the CPI print was covered in all media, linking this to market moves in rates is a unique and helpful illustration. I am not able to discern the actual effect from normal news feeds. I understand it is Dopamine inducing entertainment. However, it helps me stay invested in the correct way.
You have shown us a beautiful chart – most recently today – that shows a widening spread between equities and rates that seems very extreme to me. I think this begs a correction – why not? History shows that strong industrial growth – on-shoring for instance – is correlated with falling equity markets. Considering the cousin of Volmageddon, in several different disguises, out there, why can’t a data ‘twitch’ or an offshore crisis / setback or a House screw-up start a sharp reversal, Things are certainly more out of whack than 1987, aren’t they?
RUT getting brutally kneecapped.