Craig R. Torres’ Post

Really interesting piece by Craig Torres. (Confession: it quotes me.) Bernanke's review for the Bank of England comes at an interesting time, with the Fed headed into its next framework review. The BoE's situation, with its MPC forecast predicated on a market path for interest rates, is very different from the Fed, which has no Committee forecast but individual dots from which markets discern policymaker inclinations. Scenario analysis could add materially to public understanding for both central banks. That said, the distribution of the 2024 dots in the March SEP provided an opportunity to discuss risks around the "3 cuts in 2024" narrative. So while scenarios would be helpful, there were other avenues--at least in March--that Chair Powell could have exploited to his and the FOMC's advantage. #federalreserve #bloomberg

Could US inflation pick up again, messing up the Federal Reserve's plans - and markets expectations - for rate cuts? No one sane thinks it's likely but it is a lot less unlikely than, say, three months ago - just look at the GDP and unemployment numbers. In my latest Big View for Reuters Breakingviews, I delve deep into the risks of another spike in US price growth (and make a few references to narrative arcs and Netflix movies for good measure....): https://lnkd.in/eKHXB6EZ

I think it is overly optimistic of the Fed to think that they can lower rates and rapidly soon with a looming global recession and high energy costs that will lead to a further rise in inflation. It appears that we are heading into another similar scenario of stagflation like what was experienced in the 1970’s and early 1980’s since the Fed is making similar mistakes because it is limited to the use of only a single blunt instrument that is unwieldy.

From central banks, to inflation, artificial intelligence and the role of passive investing, CIO Corrado Tiralongo shares his insights and what's next. With inflation waning and a soft landing in the cards, today’s investment environment appears supportive for moving to an overweight position in equities for Q2 2024. Get the full article here: https://ow.ly/i3gV50RfgB6 #investmentmanagement #inflation #q1recap #investmentplanningcounsel

Federal Reserve Chairman Jerome Powell on Tuesday shifted the discussion on the timing of cutting interest rates to the labour market, acknowledging that the once red-hot US economy is now showing signs of cooling. In testimony before the US Senate banking committee, Mr Powell noted the “modest further progress” the Fed has made in taming inflation. The Fed's preferred inflation metric fell to 2.6% in June, down from its 7.1% peak in 2022 but still above its long-term 2% goal. #news #usa #economy #market

So the question is.. Are you following Monetary Policy?? YES! Liquidity drives business... So, as you plan for Q3, Q4... Sales, goals, KPIs, volume, etc... Are you taking into account the Money Printer?? You see.... As the consensus seems to be that inflation is somewhat coming under control, the FED has decided to maintain Interest Rates steady.... Bringing relief and certainty to an already uncertain market. Furthermore, Chair Powell has pretty much ruled out anothe hike in the next meeting.... But confirmed they are aready to cut rates if unemployment rises. Meaning.... They are ready to reduce rates, easing financial conditions, which in turn woud provide a better economic outlook.... at least in the short term. Therefore, look forward to a dinamic, strong ecinomy the next couple of months.... Plan for it, and seize the opportunity. The US Treasury has already announced their Bonds buy-back program... Aka money printing. But make sure you look out for the signs of a pivot in the economy... A recession still seems likely. So my best advice is: PLAN AHEAD, Plan for the best possible outcome. (It seems like in the short term, those who have been working and are well positioned will be rewarded) But also, consider the worst possible scenario. (It seems like current global economic conditions are unsustainable and the bubble has to burst at some point, make the best of it). My best! Jose G. https://lnkd.in/dkz472sa

NEWS INSIGHT: The US Federal Reserve has performed a remarkable policy pivot, signalling the end of its tightening cycle and paving the way for interest rate cuts next year as it seeks to achieve a “soft landing” for the world’s biggest economy. Having been slow to jump on inflation in 2021, when it described rising prices as “transitory”, the Fed appears eager to be sharper in reacting to the economic slowdown. The Fed’s pivot puts it ahead of leading central banks in Europe, though the European Central Bank is likely to follow the Fed’s lead in the coming months as inflation pressures ease. Xiao Cui and Nadia Gharbi, CFA, senior economists at Pictet Wealth Management, share their views: https://lnkd.in/eVuWUZEm #PictetInsights #federalreserve #centralbanks