Good morning, JPO never promised you a rose garden & the Fed minutes show a sharp hawkish turn on inflation.
Why is it doing that? Inflation is politically toxic so the Fed, being behind the curve, isn't going to do nothing about it & this hawkish tilt is self preservation. And?
Why is it doing that? Inflation is politically toxic so the Fed, being behind the curve, isn't going to do nothing about it & this hawkish tilt is self preservation. And?
Markets listened to this hawkish tilt as the Fed reaches a consensus to be all out on fighting inflation & save its credibility 👨🚒🔥🚒🧯
Rates sold off (yields higher). Short end expects more hikes & longer end also sold off as yield reaches 1.7%.
Look at Asian rates - HIGHER!
Rates sold off (yields higher). Short end expects more hikes & longer end also sold off as yield reaches 1.7%.
Look at Asian rates - HIGHER!
Australia is interesting as more is priced in as well & basically markets calling the RBA bluff of no hike (consensus is QE to be removed in Feb). Look at South Korea (we only expect 50bps) but markets moved up to 94bps.
Fed + inflation > Omicron fear, our base line scenario👈
Fed + inflation > Omicron fear, our base line scenario👈
Don't just take my words for it, read for yourself. This is the part where markets SOLD off:
"May be warranted to raise rates sooner & at a faster pace" 🦅
"To begin to reduce the size of the Fed's balance sheet relatively soon after raising rates"
federalreserve.gov/monetarypolicy…
"May be warranted to raise rates sooner & at a faster pace" 🦅
"To begin to reduce the size of the Fed's balance sheet relatively soon after raising rates"
federalreserve.gov/monetarypolicy…
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