NY FED recession probability is on highs
Unemployment is going up. Similar pattern was right before most previous recessions. Source: Wall Street Silver
Even with gold near ATHs, central banks are still buying record tonnage of yellow metal...
Source: FT
Markets are now betting on big rate cuts next year
This chart shows that money markets have raised policy-easing wagers since the middle of October: by September 2024, the FED should have cut by 70 basis points, the ECB by 65 basis points and the BoE by 40 basis points. (pricing is derived from swap rates tied to policy-meeting dates) Source: Bloomberg
Key Events This Week:
1. Fed Chair Powell Speaks - Wednesday 2. Initial Jobless Claims - Thursday 3. Fed Chair Powell Speaks - Thursday 4. Consumer Sentiment data - Friday 5. ~10% of S&P 500 reports earnings this week 6. Total of 12 Fed speaker events All attention remains on the Fed. Source: The Kobeissi Letter
Central Banks around the world are now cutting rates at the fastest pace in more than 3 years
When will the U.S. follow suit? Source: Barchart, BofA
The Fed is now expected to start cutting rates in May 2024
Here's how bonds have performed during prior rate-cutting cycles... Source: Charlie Bilello
The Fed's balance sheet hit its lowest level since May 2021 this week, down $1.1 trillion from the peak in April 2022
Annual changes in the Fed's balance sheet since 2002 by Charlie Bilello
The end of the rate hikes is typically followed by plateaus before rate cuts begin
The end of the rate hikes may not be here yet, and the Fed has already said a many times for months that the plateau is going to be “higher for longer". How long will the plateau be this time? Source: Wolfstreet
