LanlanCC
09-14 16:21

Capital Economics believe that oil-driven inflationary pressure is sustainable, and a single interest rate hike is not enough to rebuild the credibility of the Federal Reserve.

10-Year Treasury Hits 5% Intraday — Can Equities Hold?
Indexes held up far better than chips: QQQ −0.80% to $709.18, SPY −0.45% to $760.88, S&P 500 −0.48% to 7,619.98. The 10-year touched 5.012% intraday, highest since 2007, then closed near 4.95% — it did not hold 5%. Inflation and supply both pushed: Friday's data took hike odds to 88%, oil rebounded, government and corporate borrowing keeps growing. A higher discount rate hits earnings that sit furthest out — chips fell hard, the index under 1%. The Fed decides Wednesday, 2 a.m. Beijing Sept 17. The index not following chips looks like rotation, not exit. At 5%, has the market reacted enough?
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Comments

  • smile000
    09-14 17:14
    smile000
    Credibility probably comes more from forward guidance than one hike now. If energy keeps feeding core, the market may care more about the reaction function
  • LanlanCC
    10:35
    LanlanCC
    if it does not increase the rates, I expect the index could rally
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