Macro & Volatility™
Macro & Volatility™ #5: The Fed has created Optionality
Jun 16, 2024
The podcast discusses how the Federal Reserve impacts market uncertainty and equity volatility, creating optionality in market dynamics. They analyze the correlation between equities and bonds, explore the potential of a commodity supercycle to spur inflation, and emphasize the importance of strategic decision-making by the Fed in handling ongoing supply constraints.
10:29
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Quick takeaways
- Decrease in rate volatility promotes stable planning and decision-making.
- Equilibrium in rate volatility fosters positive equity market stability.
Deep dives
FOMC Meeting Discussion
The recent FOMC meeting was noted to be both dovish and hawkish simultaneously. While projections for 2024 saw steady figures, the real and nominal projections for 2025 and 2026 inched higher. A key highlight was the long-term forecast surpassing 2.5% for the first time since 2019. Market impact was notable with rate volatility decreasing significantly, allowing for more stable planning in consumer and corporate decisions.
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