Macro The FED has a chair with a very dovish message, and the committee members are walking it back. But even with J. Powell’s dovish tone, markets have been already well ahead of the FED. Bonds have rallied, and financial conditions have eased, which could create more inflationary pressure. The concern is that the market is starting to price in rate cuts earlier and earlier, and the more the market…

Macro This week, Jay Powell has surprised everyone and gave a festive giveaway to global markets. For the first time, he confirmed the assessment that the inflation is easing and going in the right direction. The meeting was mostly centred on the Summary of Economic Projections (SEP, also known as “the dot plot”), which changed the median 2024 FED funds projection from 5.1% to 4.6%. This translates to a median…

Macro Analysis of markets has been challenging as the economic models lost a large portion of their economic power due to the amount of fiscal and monetary stimulus. In addition, till October, we had ‘bear steepening’, which is very rare with few past instances and a patchy precedence for what follows. The consumer is slowing but not stopping, with robust demand data and an overall positive economic outlook. Nevertheless, the…

Macro … Pending … Rates End of the hiking cycle. The narrative has shifted away from higher for longer, and the market is rapidly recalibrating yields. The expectation is that rate cuts will start early next year, with FED funds futures now pricing a 60% chance of a 25 bps cut in March. It is also possible that the FED will start cutting later in the year but cut more…

Macro The US economy handled higher interest rates better than anyone anticipated despite multiple issues affecting the global economy. Although some restrictive monetary policy effects remain to be seen, the US remains an attractive destination for investors’ capital. The focus of the weekly update is more tactical, but it is worth acknowledging a few strategic changes that helped the US equity market to dominate the returns of any other region…

Macro Throughout the year US economy kept demonstrating its strength through continued strong economic growth. This has been achieved despite the rate-tightening cycle, but economists expect a slowdown in employment, which will have a negative impact on the GDP – a key determinant of the return on capital. Analysts expect that the boost to productivity produced by AI implementations will be at least enough to offset the slowing employment, with…