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25 Mar 2024

Don't be too excited about Fed rate cuts.

Examining Fed rate cycles since 1970s has revealed that investors have more to fear from 1st cut in a cycle than the pause. On average, sp500 is up +5% over 100 days between last Fed tightening and 1st cut. The trough in broader market is -23% over 200 days after 1st cut in a series, SRP has calculated. Source: HolgerZ

21 Mar 2024

This table explains why markets were soooo... happy yesterday.

As shown by Charlie Bilello: as compared to their December forecasts, the Fed is expecting higher Real GDP growth (2.1% vs. 1.4%), lower Unemployment (4.0% vs. 4.1%), & higher Core PCE Inflation (2.6% vs. 2.4%) but is still anticipating 3 rate CUTS this year. This uber-dovish and bullish for risk assets and gold...

21 Mar 2024

A new dual mandate for the fed?

Source: Michel A. Arouet

21 Mar 2024

FED holds benchmark rate, May cut remains unlikely

The US Federal reserve holds benchmark rate in 5.25-5.5% target range. Jerome Powell prepared remarks and Q&A answers were more dovish than during the January meeting. FOMC median forecast remains at 75 BPS rate cuts for 2024, but the forecast increased from 3.6% to 3.9% in 2025.
Gold reacted to Powell's dovish tone by jumping to a new record high and breaking the 2200 level.

Source: Bloomberg

18 Mar 2024

Financial stress is the lowest since the Fed began raising rates, which begs the question -- why cut this year? 🤔

Source: Markets & Mayhem, St Louis Fed

13 Mar 2024

The Atlanta Fed's gauge of sticky inflation has risen to about 5% on a 3-month annualized basis.

Inflation is moving in the wrong direction for the Fed, so it's interesting that the market's base case is still that the Fed is going to cut rates by about 100bp by January 2025. Source: Bloomberg, Lisa Abramowitz.

13 Mar 2024

WARNING: Reverse Repo is falling off a cliff.

And has declined from more than $2500 billion to less than $500 billion since 2023. Source: Game of Trades

7 Mar 2024

With Powell's remarks, Wall Street's hopes for a March rate cut (once 97%) officially hit 0.

With Powell's remarks today, Wall Street's hopes for a March rate cut (once 97%) officially hit 0. "Maybe he should consider using models that have been consistently accurate, instead of listening to those who give him 'different answers' (his words) that have been consistently wrong." From : Mitchel Krause, hedgeye : With Powell's remarks today, Wall Street's hopes for a March rate cut (once 97%) officially hit 0. "Maybe he should consider using models that have been consistently accurate, instead of listening to those who give him 'different answers' (his words) that have been consistently wrong." From : Mitchel Krause, hedgeye :https://app.hedgeye.com/insights/147337-mitchel-krause-how-wall-street-s-hopes-for-march-cuts-quickly-collaps?type=guest-contributors

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