...But what did BULLARD SAY?
We have seen a great rally in January out of risk off and emerging markets
Huge options expiries in the skew of puts and start of year rebalancing has driven markets to the upside
But I send you some caution to the wind
The FED is not bluffing. The pause is not here and the pivot is many moons away.
One Fed official, Bullard, suggested on January 18th, that a 50 basis point rate increase at the next fomc meeting is appropriate and rate projection for 2023 was 5.25-5.5%.
Those in the know, know that what Bullard says is usually what happens
I can tell you right now. The Bonds market has not priced in 5%+. The stock market has not priced in 5%+. The market has not priced in a 50bpt hike. The rates decision is next week. The job josses are not here, the growth slowdown is not here yet.
The Bond Yields present themselves in bottoming wedges at or approaching key support
The Dollar appears to be basing out on technical indicators and it too is in a bottoming wedge at key support
The Vix is maintaining a streak of higher lows with a strong daily bullish divergence
The Fed Pause and The Fed Pivot will only come out of the Fed 'breaking' something in the markets. They need a reason to go along with a halt.
TLDR; don't fight the fed.
Huge options expiries in the skew of puts and start of year rebalancing has driven markets to the upside
But I send you some caution to the wind
The FED is not bluffing. The pause is not here and the pivot is many moons away.
One Fed official, Bullard, suggested on January 18th, that a 50 basis point rate increase at the next fomc meeting is appropriate and rate projection for 2023 was 5.25-5.5%.
Those in the know, know that what Bullard says is usually what happens
I can tell you right now. The Bonds market has not priced in 5%+. The stock market has not priced in 5%+. The market has not priced in a 50bpt hike. The rates decision is next week. The job josses are not here, the growth slowdown is not here yet.
The Bond Yields present themselves in bottoming wedges at or approaching key support
The Dollar appears to be basing out on technical indicators and it too is in a bottoming wedge at key support
The Vix is maintaining a streak of higher lows with a strong daily bullish divergence
The Fed Pause and The Fed Pivot will only come out of the Fed 'breaking' something in the markets. They need a reason to go along with a halt.
TLDR; don't fight the fed.
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