1/4

The BofA Fund Mgt Survey shows 55% say inflation is transitory, down from 61% in Nov.

A CNBC survey, also out yesterday, shows consistent results. 59% say inflation as transitory, down from 64% at the beginning of November.

Transitory is STILL the consensus!
2/4

Since the majority of the BofA survey sees inflation as transitory, it should come as little surprise that 78% think the Fed will hike two or fewer times in 2022.

The CNBC survey expects the funds rate to be 0.72% year-end 2022. This rounds up to three rate hikes next year.
3/4

As the table shows, the market is pricing in three rate hikes next year and a 38% chance of a fourth rate hike in February 2023.

In other words, the market is pricing in roughly 3.4 hikes in the next 14 months, more aggressive than the results of the surveys above.
4/4

Add it up and we see a disconnect between what managers think and what the market is pricing.
Managers simply do not believe the Fed will risk breaking the economy or markets by being as aggressive as the markets are pricing.

Will the Fed reconcile these positions today?

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More from @biancoresearch

16 Dec
1/4

Citigroup Inc., Carlyle Group Inc., Millennium Management and Citadel, Ken Griffin’s hedge-fund firm, are allowing remote work through the holiday in response to the latest rise in infections.

bloomberg.com/news/articles/…
Read 4 tweets
16 Dec
1/4

The message from the BoE and the ECB this morning is inflation is transitory.

BoE head Andrew Bailey is on TV right now saying that while they hike rates today and will probably need to do more, inflation will peak at 6% in April. aka, transitory.
2/4

To summarize the Lagarde/ECB presser, inflation is higher than we thought, it is possible it could go even higher. But do not worry, inflation is transitory, and we see no need to address it by raising rates in 2022.
3/4

And as I detailed yesterday, the consensus opinion on Wall Street is STILL inflation is transitory.

Read 5 tweets
13 Dec
1/15

As I noted before, TIME's Person of the Year is a good contrarian indicator.

Elon Musk was named 2021 PoY earlier today.

So, what is the history of this indicator? A thread to outline.

time.com/person-of-the-…
2/15

First, the idea of Magazine cover as contrarian indicators, and especially TIME PoY was developed by one of Wall Street's greatest thinkers, Paul Macrae Montgomery.

I was honored to call him a friend.
@ritholtz remembrance in 2014

bloomberg.com/opinion/articl…
3/15

Biden Harris was PoY last year (2020).

One year later and Biden's approval rating is in the tank and Ds are figuring out what to do with Harris
Read 15 tweets
12 Dec
1/10

Some concerning developments on COVID in the last few hours.

A thread to explain, and a clarification ... none of what is explain below is what I want, rather it is what I fear is coming.
2/10

*S. AFRICA DAILY COVID CASES AT 37,875, BREAKING PREVIOUS RECORD

This chart does NOT include the headline above (Johns Hopkins will update all countries this evening).

A nearly 38,000 daily case count will shoot off the top and the chart will need to be rescaled.
3/10

See the rest of Africa, their case counts are also starting to go vertical (orange line).

It will be interesting to see what this data points shows when updated tonight and the coming days.
Read 12 tweets
11 Dec
1/11

What is the bond market telling us?

I would argue that the Fed will hike rates so much in 2022 that they will "break something."

And they really don't have a choice.

A thread to explain.
2/11

First, what are the markets signaling?

Three rate hikes in 2022 are priced in (>50%, green).

A March hike (35%) and a potential 4th hike in February 2023 (38%) are not out of the question, still below 50% but "in the conversation."
3/11

The next chart shows, the terminal funds rate, or the rate at which the Fed will stop hiking, is somewhere between 1.75% to 2.00%.

If the Fed follows the market and hikes 4 times over the next 15-ish months, they will only be 2 hikes away from the terminal rate.
Read 14 tweets
5 Dec
1/5

A follow-up to my post that US cases are about to rise a lot, following Europe, and politicians will panic and impose economic restrictions and foster slower growth and more inflation.

@ErikSTownsend @EpsilonTheory @ttmygh @MishGEA @GeorgeGammon

2/5

Here is the vaccination chart again.

We are told that a fully vaccinated person has six-months of protection. Then one should get a booster. Image
3/5

This version shows the percentage of the population over 12-years old that has been fully vaccinated in the last six months and has gotten a booster.

Hence, the percentage of the population that is fully protected. Image
Read 5 tweets

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