As per Fedwatching: "FOMC voters have said over and over that 2% is the target. Getting inflation down to 2-ish (say 2.5%) is probably not good enough. If we’re still at 2.5% at the end of the year and the job market is in decent shape, I think it’s more likely that they’ll be hiking instead of cutting." EU and USA are on 2 different paths. Today data of european industrial production, Germania gdp, wholesale price index, italian export are all in "recession mode"
Hey, Giovanni! Thanks for the reply. Noted and agreed. Have been noticing this divide, but made no mention of it. Saw comments appear this morning (U.S. time) on Bloomberg about rate cuts not being guaranteed this year.
If the outlook is truly not good, I ponder how much longer that restrictive view will be held. Granted, these comments came from a from a hawk.
“The geopolitical threat has increased because what we saw until now by the Houthis — I think it’s not the end, it might be the overture to something much more broad based, which will impact the Suez Canal and increase the prices there,” Robert Holzmann said Monday.
“We should not bank on the rate cut at all for 2024.”
Think we can credit some of the loss in momentum to the softening data in Europe as well. Also, a lot of those long-term trends pushing on yields, discussed in last week's letter, may apply to Europe as well. Will take a look at that article you sent via email, today, by the way!
As per Fedwatching: "FOMC voters have said over and over that 2% is the target. Getting inflation down to 2-ish (say 2.5%) is probably not good enough. If we’re still at 2.5% at the end of the year and the job market is in decent shape, I think it’s more likely that they’ll be hiking instead of cutting." EU and USA are on 2 different paths. Today data of european industrial production, Germania gdp, wholesale price index, italian export are all in "recession mode"
Hey, Giovanni! Thanks for the reply. Noted and agreed. Have been noticing this divide, but made no mention of it. Saw comments appear this morning (U.S. time) on Bloomberg about rate cuts not being guaranteed this year.
https://www.bloomberg.com/news/articles/2024-01-15/davos-2024-holzmann-warns-no-one-should-bank-on-ecb-rate-cuts-this-year?sref=TBDibEcD
If the outlook is truly not good, I ponder how much longer that restrictive view will be held. Granted, these comments came from a from a hawk.
“The geopolitical threat has increased because what we saw until now by the Houthis — I think it’s not the end, it might be the overture to something much more broad based, which will impact the Suez Canal and increase the prices there,” Robert Holzmann said Monday.
“We should not bank on the rate cut at all for 2024.”
Think we can credit some of the loss in momentum to the softening data in Europe as well. Also, a lot of those long-term trends pushing on yields, discussed in last week's letter, may apply to Europe as well. Will take a look at that article you sent via email, today, by the way!
https://themacrocompass.substack.com/p/the-liquidity-conundrum
talking about liquidity, I think this is a very interesting article
I will deepen the topic
Thank you for sharing!