We all see the consequent bloodbath in equity markets and it doesn’t strike as particularly surprising, right? The FOMC is totally comfortable (!) with financial conditions tightening, as we clearly still (!) have a job to do on cooling down demand and if that involves raising Fed Fund rates >2.50% we won’t hesitate (!) to do that as we need to see is inflation coming down in a clear and convincing way (!).īut now, why would I define market reactions as ‘‘interesting’’? You gotta admit he can’t be more straightforward than this. 2.00-2.50% on Fed Funds), we won't hesitate to do that’’.
‘‘If that involves moving past broadly understood measures of neutral rates (i.e. ‘‘We need to see growth moving down from very high levels, and we clearly have still a job to do on cooling down demand’’ ‘‘Financial conditions overall have tightened significantly. The three main lines from his interview were: Please also consider subscribing to the show on your favorite podcast app so you don’t miss any new episodes, and help us spread the word if you like the podcast!īack to it: Powell played the hawkish horn again, and markets are reacting in quite some interesting ways. Links here: Apple, Spotify, Google, YouTube. If you haven’t yet listened to The Macro Trading Floor podcast, this week is your chance: Andreas and I interviewed a very special guest and trust me, you don’t want to miss this! :) Introduce for the first time my Volatility Adjusted Market Dashboard (VAMD), a tool I’ve been working on to further deliver value to The Macro Compass community. Reflect on some interesting market moves happening under the surface ĭiscuss two of my macro ‘‘polar stars’’ indicators that can help us navigate and explain current market circumstances In such a choppy market environment, systematic risk management techniques and a data-driven investment approach are key to tell the forest from the trees and reduce drawdowns in your portfolio.
Powell’s remarks in the Wall Street Journal interview this week were quite interesting, and markets seem to have noticed: we have seen quite some wild moves, but again the most relevant price action is happening under the surface. ‘‘What we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that: we clearly have still a job to do when it comes to cooling down demand’’
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