Longer-term inflation expectations are rising again.
The market's implied rate of inflation over the next five years has risen to the highest level in more than a year, at 2.6%, according to breakeven rates. Source: Bloomberg, Lisa Abramowitz
Yes, this week was painful for stocks.
But putting things into perspective, equities have been more resilient to higher rates recently versus previous periods of rising rates. Source: Edward Jones
JUST IN: Federal Reserve will cut interest rates by 50 basis points as soon as June and 150 points by the end of this year, says State Street in call against Wall Street consensus
Source: Bloomberg, radar
From expecting 6 Fed rate cuts to just two in 2024 😉
Source: Markets & Mayhem
Jamie Dimon's 61 page annual shareholder letter is finally out for FY2023!
-A rate spike is very possible with stickier inflation. Interest rates could soar to 8% -Says Federal deficit is a real issue hurting business confidence (govt spending could keep rates high) -US economy resilient so far with consumer spending, but the economy has also been fueled by government deficit spending and past stimulus -Market is pricing in 70-80% chance of a soft landing/no landing...Dimon thinks that is too high -Inflation resurgence, political polarization are risks for this year (Ukraine, Middle East, China) - AI may be as impactful on humanity as the printing press Source: SpecialSitsNews, Barchart
It's the liquidity, stupid! Yellen's stealth QE overpowering Powell's QT.
This probably helps risk assets performing well despite high interest rates and qt (Chart via SRP thru HolgerZ)
Central banks cut rates at the fastest pace since heading into the pandemic.
Source: BofA, The Daily Shot
In May 2020, there were 21 countries with negative interest rates. Today there are none.
Sanity has returned to the global bond market... Source: Charlie Bilello
