You Keep Using That Word…
@RipcordLoki：
Tue Mar 28 Inigo Montoya coined it perfectly. Fast forward to the modern day pivot narrative. Once again frantic calls can be heard for a reversal of Fed policy. Is that what is happening? I don’t think so. I’m betting on a pause for ’23 and some rate drops in ’24. Is that Fed easing? Nope. Powell has made it crystal clear (again for all those with their fingers in their ears) that the Fed’s primary concern is balance sheet contraction. That contraction is anticipated to continue into ’24 and likely beyond. Contraction is the equivalent of synthetic rate hikes. Get used to disappointment folks. Stocks could be chained in no man’s land for several years going forward. Compound that with a tedious gravitational pull to the downside as earnings adjust to higher rates. While investors languish in the pit of despair, traders will bask in a new environment dominated by volatility. Longs that I am focusing on are VIX, oil (CL, UCO, XLE), natural gas (NG, UNG), and bonds (ZB, TLT).
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