A developing story?
Source: Not Jerome Powell on X
Fomc recap
Source: Bloomberg
I am back my friends !!!
While some of the FOMC statements were hawkish, the overall outcome is that the Fed is a little more dovish than the market had expected. Indeed, the Fed is shrugging off the inflationary signals from the latest University of Michigan consumer survey (which pointed towards rising inflation expectations) and instead is preferring to line the dot plot up with the growth deterioration. The slow down of QT starting in April helped as well. Stocks climbed yesterday, regaining some of their footing from a market sell-off that has been going on since February. The Dow jumped 0.9% and the S&P 500 surged just over 1%. The Nasdaq Composite gained 1.4%, but remains in correction — that is, the index is still more than 10% off its high.
The fed dot plot >>> Look at the wide dispersion around the "longer run" dots.
No real agreement on where they're heading. Source: Seek Wiser @SeekWiser_
👉 The Bank of Japan held interest rates on Wednesday as the rising risk of a global trade war and potential downturn in the US weighed on Japan’s hope for a sustained economic revival.
👉The unanimous decision, which came at the conclusion of a two-day meeting of the Japanese central bank’s policy board, left the short term policy rate at about 0.5 per cent. 👉The result was widely forecast by economists and had been priced in by markets, according to traders. 👉In a statement accompanying the decision, the BoJ warned that “high uncertainties” remained around Japan’s economic activity and prices. The central bank made particular reference to the “evolving situation regarding trade and other policies in each jurisdiction”. Source: FT
⚠️Markets are RAPIDLY shifting again:
The market is pricing in almost 3 Fed rate cuts in 2025, the highest since November. This is up from just 1 reduction expected just 2 weeks ago. This comes as US economic data has deteriorated sharply, and Treasury yields have dropped. Source: Global Markets Investor, Augur Infinity
2025 rate cut odds:
from just ONE 2 weeks ago to MORE THAN TWO now... Source: zerohedge
The ECB has recorded the biggest loss in its 25y history.
This is the result of its aggressive policy responses to Eurozone crises & surging inflation—1st buying large amounts of bonds & then sharply raising interest rates. As a result, ECB is earning less interest from the bonds it holds than it has to pay to banks for their deposits. Source: HolgerZ, Bloomberg
