GB10Y vs GBP/USD #gilts #gbp #recession
The 10 Year gilt vs the GBP.
Fractal taken from 2007 just before the 2008 recession.
interest rates are expecting to keep raising! why this chart indicates they are coming to the end of the tightening cycle!
as mentioned before I'm expecting more strength in the pound due to weakness in the dollar.
Expecting the BOE to pause rate hikes next meeting after the aggressive 50 bpts increase.
GBP strength would relieve pressure from BOE and we should see inflation drop. possible we see more banking contagion and possible further hike's if inflation doesn't drop fast enough.
but how long can they tighten for? before revenue loss exceeds Debt. credit will be way more expensive, mortgage demand drops. - this would cause a pull back in the housing market, this is when I would expect the fed to crash rates, to support crashing market's and the BOE to follow suite.
going off this chart 2007 fractal - by April 2024 we should see GBY10 back down too 2%.
which mean's the fed must of cut real rates by then in order to see BOE follow their policy.
bad for pension's as real inflation will be much higher than 2%.
but would create much more liquidity for market's and cheaper debt for growth. more revenue to the service the mountain of debt, in order to strengthen GDP.
Fractal taken from 2007 just before the 2008 recession.
interest rates are expecting to keep raising! why this chart indicates they are coming to the end of the tightening cycle!
as mentioned before I'm expecting more strength in the pound due to weakness in the dollar.
Expecting the BOE to pause rate hikes next meeting after the aggressive 50 bpts increase.
GBP strength would relieve pressure from BOE and we should see inflation drop. possible we see more banking contagion and possible further hike's if inflation doesn't drop fast enough.
but how long can they tighten for? before revenue loss exceeds Debt. credit will be way more expensive, mortgage demand drops. - this would cause a pull back in the housing market, this is when I would expect the fed to crash rates, to support crashing market's and the BOE to follow suite.
going off this chart 2007 fractal - by April 2024 we should see GBY10 back down too 2%.
which mean's the fed must of cut real rates by then in order to see BOE follow their policy.
bad for pension's as real inflation will be much higher than 2%.
but would create much more liquidity for market's and cheaper debt for growth. more revenue to the service the mountain of debt, in order to strengthen GDP.
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