The Macro Trading Floor A New Fed Put?
May 3, 2024
Exploring potential soft patch in nominal growth, impact of rate hikes and Fed policy on private sector, stagflation concept. Repercussions of volatility shock on carry traders in Dollar JPY. Market fluctuations in assets, trading ideas, and recommendations for the week.
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Unusual Economic Cycle
- Current economic cycle differs from previous ones, as soft data lagged behind hard data.
- This is attributed to inflation's impact on sentiment and aggressive rate hikes by the Fed.
Macro Investing Discrepancies
- Macro investing involves identifying discrepancies between consensus, pricing, and personal views.
- Current economist consensus suggests high nominal growth, while market pricing indicates hawkishness, creating investment opportunities.
Consider Fed's Influence
- Consider Mr. Powell's influence when investing in bonds, as he dictates rate cuts.
- The Fed's dovish stance implies potential rate cuts with any economic weakness.