Growth and inflation are in retreat, stocks are tumbling, corporate debt spreads are leaping, and yield curves are flattening with the economically clairvoyant U.S 10 and 2-year spread .38 today, from an optimistic 1.59% peak in March 2021. This is not about Ukraine. This is a ‘free-money’ debt-enabled consumption and gambling frenzy that’s ending with central banks out of time still pumping cash and holding policy rates at zero. Now they are expected to hike aggressively—two words: bonne chance.
This discussion from February 3 offers some data-rich counterpoints to the multiple-hike consensus view.
The Fed’s bark will not turn to bite, and we provide a framework on how to make money by betting against the multiple rate hikes now being widely discounted across all asset classes. Here is a direct video link.
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