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September 20, 2024
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HEW: Fed Risks Forcing a Failure to Land

  • A forceful 50bp Fed rate cut came in defiance of the data’s resilience. Excessive focus on politics and labour demand over disinflationary gaps risks over-easing. Brazil has already started reversing its rate cuts this week. The BoE is rightly more cautious.
  • Next week, the dovish focus flies to the SNB, Riksbank and Bank of Mexico. Fed speakers may dampen dovish extrapolated pricing after forcefully encouraging it. The inflation highlights are France and Spain’s Flash HICP for September, plus the US PCE for August.

By Philip Rush

September 13, 2024
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HEW: Push and Pray Pricing

  • Resilient US inflation and UK employment releases were also fundamentally inconsistent with dovish calls, but market participants are still pushing pricing for 50bp from the Fed and praying it submits. The ECB cut and remains likely to next go in December.
  • The BoE seems set to skip a cut this month after frontloading its easing beyond the data in August’s finely balanced decision. We maintain our call for a 25bp Fed cut and hope it reminds market bullies not to fight the Fed. Calm down, kids: there is no recession.

By Philip Rush

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