$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$ Trying to piece together the current market logic.
The USD and 2-year yields are rallying, primarily based on the previously hawkish dot plot, which itself was built on high oil prices at the time.
So, the market now views the Fed's dot plot as stale and doesn't believe a rate hike is coming. Instead, once economic reports over the next 2+ months reflect the impact of fallen oil prices, the market expects the Fed to catch up and pivot to cuts.
That's why the 10-year yield is staying flat while rate-sensitive sectors like Housing are rallying—they've already priced in the dot plot being completely outdated.
Therefore, outside of the USD and 2-year yield rallying, the rest of the market is already pricing in eased inflation and higher rate cut probability, hence the rally.
Meanwhile, metals and Bitcoin are under pressure due to the stronger USD, which is unfortunate.
There was talk from an official about fixing this by having the Fed use more real-time data and get rid of the old, ineffective dot plot.
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