Profit forecasts have turned decisively downward, while inflation will likely prove more stubborn thanks to oil supply cuts. On the bright side: Bond and the Beatles.
John AuthersBloomberg Opinion Columnist
Investors are getting optimistic again of an earlier Fed reversal on rate hikes, but systemic risks and bear-rally traps are still out there.
The measure that the Fed watches most closely is still rising. Don’t expect a quick pivot on rates for anything short of a Lehman-style financial crisis.
What if there was a meeting at the Plaza Hotel to air out differences? It’s happened before in truth and fiction, but the money and the will aren’t there for currency markets this time.
There are increasing signs that inflation is abating, but the Fed seems determined to keep hiking despite the cost to the economy and jobs.
The world should watch closely what happens next in the UK. It could be a precedent for the confidence game being played out in markets.
Something significant is going on in the markets. The question is whether investors are falling victim to the propensity of extrapolating trends infinitely.
The Fed chair is plainly channeling his legendary predecessor, and markets finally realize that no early pivot to ease rates seems likely.
From China’s flabby currency and Italy’s right-wing fever to Sweden’s 1% shock and Dr. Copper’s confidence show.
The Fed could wreak damage on housing markets that were already strained by affordability. Homebuilder confidence is falling sharply.
A crisis with the pound on Black Wednesday produced an early form of Brexit that shocked the world. And now? When global imbalances are this entrenched, interventions should be resisted with a stiff upper lip.
The sad life of Knut the zoo cub mirrors today’s decisions on rates — is it better to ease pain on the economy and risk more inflation, or to let it die for a greater good (and save institutional reputations)?
From the data to the market reaction to how the Fed must now view the problem, the inflation picture is awful — for everyone.
And not for the first time. Attitudes toward events in the war have been inconsistent since the beginning. A little humility is in order.
Discipline, patience and a certain passivity paid off. Investors might take heed.