Markets It didn’t quite turn out how we expected it to be. Especially on bond markets. Fed Chair Powell and ECB Lagarde missed out on the opportunity to talk up markets towards their envisioned monetary policy paths . In case of the US, we follow some of Powell’s “caution” given the absolute level of the policy rate and the fact that core inflation starts showing signs of coming down. Nevertheless, market pricing still doesn’t stroke with Fed intentions to deliver multiple rate increases (2 times 25 bps as envisioned in December dot plots). In case of Europe, we are totally flabbergasted by the bond rally seen yesterday , even as ECB Lagarde during the Q&A initially reluctantly, but later on more decisively, pushed back against the notion of hitting a potential peak rate (soon) after March and against the idea of cutting back rates soon after. EMU core inflation is still rising and the ECB wants to be absolutely sure that inflation is back at 2% – “not just for weeks or even months” – before reversing the current course. Our longer term view remains bearish on especially European bonds , but we acknowledge that short term momentum could […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
