Extreme Market Swings Volatility returns
Traders recalibrate rate-cut wagers
Easing financial conditions seen ‘neutralizing’ Fed tightening
Stocks and bonds staged their worst synchronized drop of the year on Monday and Tuesday, while Thursday saw the biggest reversal of an S&P 500 rally since August.
An exchange-traded fund tracking long-dated Treasuries suffered its worst week since October as 10-year yields reached the highest in more than four months.
Torsten Slok, the Apollo Global Management economist has repeatedly warned that gains in asset prices are working against central bankers’ goals.
“The tailwind from easing financial conditions is overwhelming and neutralizing the rate hikes from last year,” Slok, who in March predicted no rate cuts this year, said in a phone interview.
“It’s not surprising that the economy is re-accelerating and, therefore, rates will have to stay higher.”
Brent crude climbing above $90 a barrel.
Minneapolis Fed President Neel Kashkari managed to raise eyebrows by saying interest-rate cuts may not be needed this year at all if progress on inflation stalls.
Bloomberg 5 April 2024
Financial conditions are now their easiest in almost two years, since before Russia’s invasion of Ukraine.
John Authers 4 januari 2024
https://englundmacro.blogspot.com/2024/02/desperately-seeking-restrictive.html
Inflation may not fall for months
‘The case for runaway inflation is still not there, and instead it is asset prices that could run out of control,’ one trader says
Traders are expecting five more months of consumer-price index reports to show no further progress being made on the annual headline rate of U.S. inflation.
That rate is seen as likely to come in between 3.2% and 3.4%
Vivien Lou Chen MarketWatch 5 April 2024
Börsen Stockholm och New York 5 april 2024
https://englundmacro.blogspot.com/2024/04/borsen-stockholm-och-new-york-5-april.html
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