The race to raise rates summarized in one chart
Source: LSEG Datastream, Reuters
When will the Fed start cutting rates?
This chart from James Bianco is derived from market pricing. The first cut is currently priced for August 2024 (top panel), or 337 days away (bottom panel). Notice the first cut is always about 10 to 12 months away. It never gets any closer.
Here's the downside risk on gold. Either this longstanding correlation is broken or inflation is grossly understated and real rates remain negative
Source: Henry Smith
ECB's Lagarde: "Rate cuts weren't discussed, would be totally premature".
Meanwhile, markets see the first ECB cut at April 2024 meeting. Source: Bloomberg, HolgerZ
Startups are increasingly shutting down
Rising rates, lower liquidity and reduced risk appetite are hurting funding. Difficult business conditions are eroding viability further. Source: Markets & Mayhem
Gold (in yellow) vs. VIX (in green). Is gold the new 'fear index'?
It has systemically decoupled from real rates for sure. Source: Bloomberg
The relative Nasdaq 100 bull does not care about no rates moving higher...
Source: TME, Goldman Sachs
Wondering why high interest rates hasn't hurt sp500 performance so far?
Just have a look at the chart below courtesy of Linas Beliūnas. The S&P 500 heavy weights are full of cash and have been benefiting from the higher yield paid on short-term deposits. E,g Apple is making $1 billion on their cash holdings doing absolutely nothing...
