Stay Calm and Watch the Fed
Another economist confirms what we've been repeating for a long long time. Fed is the market's ultimate put option (and it's the Fed who is short).
As long as the central bank keeps increasing (or at least not decreasing) it's asset purchases the market is bound to be buying the put option the Fed sells. Corrections shall be constrained within a reasonable percent drop and volatility shall be under control.
Need to be very mindful of what the Fed does and what message it gives to the markets. The next meeting is 27-28th July. Stay tuned please....
The last time he spoke Mr.Powell said he still claims inflation is transitory (which I agree with), but started mentioning slowly that maybe "it is time to start thinking about starting to think about asset purchases pace some time in the future". This of course assumes a pretty long time until it really happens (think later than most economists think), but we need to keep that in mind, as this will possibly be the trigger for a bigger mid-cycle correction (10-20%).
Yours,
GlobalAlphaS
$SPX500$DJ30$NSDQ100$UK100 $GER30
www.cnbc.com/video/2021/07/21/markets-are-heading-for-an-unavoidable-risk-off-episode-knapp-says.html... Show More
Great post Pawel! Tensions are high for these meetings but it seems like everybody is expecting them to start talking about tapering in the upcoming 2 meetings so it will be interesting to see how much things were priced in .... Show More
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Sat Dec 07 2024 13:51:58 GMT+0000 (Coordinated Universal Time)
