If you are not familiar with the #bigflip thesis, coined by the great @INArteCarloDoss, the bottom line is this:
-Labor inflation is entrenched and remains very hot (holding core inflation high)
-Goods will inflect higher (leading to more volatile inflation
The consequences are:
-Labor inflation is entrenched and remains very hot (holding core inflation high)
-Goods will inflect higher (leading to more volatile inflation
The consequences are:
-Repricing of the yield curve (no cuts in '23)
-Dollar up
-Equities lower
-Precious metals lower
-Dollar up
-Equities lower
-Precious metals lower
Right now the market is pricing in a perfect scenario or "Gothilocks" as a famous shrub @agnostoxxx puts it. This illustrates a fundamental misunderstanding by the market of longer tail inflation dynamics and will have to reprice lower.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
