Jackson Hole
Lockstep Markets Primed for All-or-Nothing Powell Sweepstake
- Cross-asset correlation almost doubles as focus turns to macro
- ‘Risky assets face a reality check,’ Barclays strategists warn
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No one knows for sure what Chair Jerome Powell will say in his speech on Federal Reserve monetary policy Friday. One thing is clear, though: the potential for marketwide shock is sky high.
Stocks, bonds, commodities -- everything is moving in lockstep, their unified swings turning almost exclusively on views as to whether the central bank will cause a recession. The obsession with economic data and remarks by Fed officials have driven a measure of cross-asset correlation tracked by Barclays Plc to almost double, putting it among the highest levels of the past 17 years.