On today's episode of "Forward Guidance," Jack Farley is joined by Alfonso Peccatiello, author of The Macro Compass newsletter and host of The Macro Trading Floor podcast on the Blockworks network. Up until very recently, Alfonso was running a multi-billion dollar fixed-income book.
Alfonso joins Jack to share his outlook on the Fed’s efforts to tighten financial conditions in the hope of reining in inflation. Will these efforts crush the stock market? Will the Fed get its much-desired soft landing? Are there emerging signs of stress in credit spreads? In Alfonso's mind, one thing is for sure, Powell will NOT pivot this time. Monetary policy will be tightened until inflation is under control, Alfonso argues, and those investors relying on a Powell Pivot will be left holding the bag.
Alfonso’s writings can be found at https://themacrocompass.substack.com/, here are some of the specific pieces he and Jack referenced:
“What If?”: https://themacrocompass.substack.com/p/what-if?s=r
“A Mistaken Attempt at Sounding Dovish”: https://themacrocompass.substack.com/p/serious-ish-about-inflation?s=r
Alfonso Peccatiello on Twitter: https://twitter.com/MacroAlf
Jack Farley on Twitter https://twitter.com/JackFarley96
Blockworks on Twitter https://twitter.com/Blockworks_
Subscribe To The Blockworks Newsletter: https://blockworks.co/newsletter/
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For more information, please visit https://bcbgroup.com/jack
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(00:00) Introduction
(00:33) Tightening Financial Conditions
(08:17) The Macro Compass Quadrant Model
(12:08) Stock Market Time Horizons
(15:44) Shorting The S&P 500
(19:17) BCB Ad
(20:06) Surging High Yield Bonds in Europe
(22:53) Credit Spreads
(29:43) Powell Is NOT Going to Pivot
(35:42) Will the Fed Get Their Soft Landing?
(38:58) When Will Bonds Become a Buy?
(47:08) Changing Your Minds in Markets
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
Forward Guidance