jeroen blokland Profile picture
Multi-asset investor. all-round speaker. Charts & Frameworks. Substack contributor. Founder @true_insights_, providing investment research, ideas & portfolios

Nov 3, 2022, 5 tweets

On the #FederalReserve hawkish pivot 1/n

It's about the destination now
Forget the speed of rate hikes
Focus on the terminal rate and
how long the Fed must stay there

= how much cumulative pain is needed to crush #inflation

1/n
Powell: 'If we were to overtighten, we could use our tools to support the economy later on.'

Or in other words, we are willing to risk a #recession to get the 'job done' and push #inflation to target.

1/n
Interesting end to the presser with one journalist stating #equities were up after #FOMC - which was not true -

Powell repeated virtually all hawkish sentences he had made during the press conference. He cares about (tighter) financial conditions, not about equities.

1/n
Equities and risky assets fell, but again there was no capitulation. Death by a thousand cuts.

Yet, we are now really close to a significant and broad-based decline in #inflation numbers, meaning another pivot dream is already in the making.

Join @true_insights_ to learn how to position for this
true-insights.net

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