“The economy may be doing fine and asset prices are roaring. As this column has discussed previously, inflation targeting is perhaps outdated monetary policy — but as long as that is still officially the goal, tightening tonight will soon be perceived as a potential mistake.”
Category: fed
Before The Fed: China?! “An Illegal Siege” On Qatar! Crude Carnage. Oh, My.
Yeah, so this afternoon the Fed will almost surely hike and folks will be looking
Goldman Spent A Long Time On This Awesome Fed Preview, So The Least You Can Do Is Read It
Ok, so the Fed is going to hike tomorrow. And the best part about it
They’re “Taking Away The Punch Bowl As The Party Gets More Messy”
“But that’s utterly the wrong thing to be thinking about.”
“I’m The One Who Got Us Into This Mess,” A Brent Death Cross, And “The Day Before Tomorrow”
Today is all about tomorrow…
“Oil Is The Fed’s Canary”: Is The Fed “Sleepwalking Into A Policy Mistake”?
“…never have forward expectations been so dovish (Chart 4), inflation break-evens been so beaten down, and data surprises been so negative ahead of a Fed hike in this cycle.”
One Trader Thinks You’re Silly, Says You’re “A Wannabe Method Actor”
“Trading these markets is turning us all into wannabe method actors. We’re all desperately hoping someone will tell us what is our motivation.”
Full Week Ahead Preview: Fed In Focus
Hopefully, the weekend gave you a chance to catch your breath after “Super Thursday.”
Yeah, So The Fed Is Going To Hike Into A Deflationary Backdrop
“But the inflation data has to be concerning, especially as long term inflation expectations have now completely retraced their post-election increase.”
Goldman Presents: “FOMC Alpha” Or, How To Trade The Fed
“What is perhaps less well known is that a sizable portion of average yearly asset returns is generated on these days.”
“Goldilocks And The 3 Hikes”
“However, just like in the fairy tale, this perfect scenario is unlikely to last.”
Deutsche Bank: “Path Of Least Resistance” Is For Everything To Rally
“The conclusion is that the Fed can’t do a lot that appears credible to the market. The path of least resistance is therefore a soggy dollar, low yields and robust equities.”
Nikkei Tops 20,000 On Batshit Crazy BoJ Balance Sheet; Global Stocks Rise Ahead Of Jobs
Well, the Nikkei crossed 20,000 for the first time since 2015 overnight. And really, why
China’s “No Bears Allowed” FX Policy Still In Spotlight Overnight
Ok, so the overnight fireworks were largely confined to early Asian trading. As noted last
Guest Post: Are Stock Traders Actually The Pessimists Here?
“Could it be utility stocks smell the coming economic slowdown ahead of the bond market?”
Here’s This Week’s “Central Bank Chatterbox”
So about two weeks ago, we said that Goldman is super excited about their new “Central
“The Honeymoon Period Is Over” – Bullard Ain’t Buyin’ Trump And Other Overnight News
“Washington does have to deliver at some point and I think that is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of American politics would settle in.”
Strategist: Go To The Party But For God’s Sake, “Know Where The Nearest Exit Is”
“There’s certainly no guarantee that the party stops any time soon. Maybe I am just a grumpy macro man, but even when attending the party, I am going to make sure I know where the nearest exits are located.”
Trader: This Market Needs A Healthy Dose Of “Blunt-Force Trauma”
“The errors weren’t policy mistakes from the Fed or BOE, but from investment banks-turned-hedge funds that refused to listen to what they were being told and fought the tightening cycle every step of the way.”
“Unexplained, High-Volume Drops,” Yuan Shenanigans, And A Cartel Meeting
Well, things have been “choppy” overnight and especially around the flood of OPEC headlines that
Fed Minutes: “Soon” Or “Soon”-ish
“Most participants judged that if economic information came in about in line with their expectations, it would soon be appropriate for the Committee to take another step in removing some policy accommodation. A number of participants pointed out that clarification of prospective fiscal and other policy changes would remove one source of uncertainty for the economic outlook.”
How The ECB “Actively” Rescued Markets Ahead Of The French Election
“But the ECB is more than just a “passive acquirer†of assets, in our view. We think they are taking an active role in bond buying to manage the fallout from policy uncertainty (and prevent a tightening in credit conditions that would ensue if they didn’t).”
Trader: You’re Thinking About The Fed All Wrong
“But a subsequently flatter yield curve shouldn’t be read as signifying a policy misstep.”
Trader: They Ruined My Day, But Stocks Are Still “In A World Of Their Own”
“And then events tried to conspire to rob me of all of my sanguineness”…
Trader: “The World’s A Scary Place,” But That’s Always Been The Case
“To be fair, we still have loads of quantitative easing going on and the world remains a scary place. But it’s always been a scary place. We just have selective, as well as short, memories. And if black swans remain your major investing concern, then economic numbers are of very little import.”
It’s Too Quiet: Except For China. And South Korea. And Collapsing Metals.
It’s Tuesday, and they’re voting in South Korea. There’s an annoying power vacuum over there
One Trader Tells Us “A Tale Of 2 Tapers”
“For as long as the U.S.’s debt profile continues to deteriorate, it’ll be a difficult environment for the major buyer of that debt, the Fed, to step back. Especially if the related signal also lowers the demand from foreign governments.”
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