There was a little of something for the bulls and the bears with December’s monthly inflation report. On the surface, inflation is coming down. However, if we look underneath the hood, most of that inflation is goods. Services inflation however remains doggedly high (i.e. wages). And whilst goods inflation could fall to “zero” – if services inflation remains twice the Fed’s 2.0% objective – they will continue to tighten (even if that means simply holding rates at a higher level)
"Inflation"
Fed Gets Green Light… Market Thinks Otherwise
The market ripped higher on news of a softer-than-expected wage inflation report. But haven’t we seen this script before? Markets have a recent history of front-running the Fed… only to be bitterly disappointed. From my lens, nothing in this print changes the script for the Fed. And markets are not set up to hear that…
Sorting the ‘Wheat from the Chaff’ in 2023
There are two key criteria that every investor should execute in 2023. What worked for the past decade will not be the same for the next decade. Interest rates are going to be higher for longer. This post explores what that means…
A Framework when Thinking about the Fed
How fast? How high; And for how long? That’s the framework when thinking about the Fed’s policy moves. From mine, the market are offside in terms of how high and particularly how long. What we do know is the pace will slow.
For a full list of posts from 2017…