With the Fed Funds future market pricing in an almost certain 25 bps rate hike on March 15 following a series of hawkish comments by Fed officials this week, hitting 90% as of this morning, up threefold in the past week...
While virtually all prominent market commentators, most recently Bloomberg's Mark Cudmore, now seem convinced that the Fed will hike by 25bps on March 15, when just as recently as a week ago the question was June or September, some are still skeptical.
With the US stock market likely to continue its levitation today, it means that by close of trading, the S&P500 will be above 2,400, the same as Goldman's year end price target, and 100 points away from Bank of America's "euphoric blow off top" destination, which is also known as Michael Hartnett's Icarus Trade. In a note released overnight, Hartnett confirms that he is "sticking with our “Icarus Trade” targets: SPX 2500, GT30 3.5%, DXY 110, oil $70/b", even as he admits that the euphoria level in stocks is unprecedented:
From Mark Cudmore, a former FX trader who writes for Bloomberg
March Hike Is Now Base Case as U.S. Data Game Shifts: Macro View
Lael Brainard’s hawkish comments confirm that a March rate rise must now be the base case for investors, and it’s unlikely the upcoming data even matters.
Brainard is not only part of the Fed’s core, she’s arguably the most dovish member of it. When she sends a hawkish message, you need to pay attention.
A few years ago, you were laughed at for calling the stock market a bubble. Now everyone, even the financial mainstream media is calling it a bubble and continuing to openly promote it. A few years ago, you were laughed at for saying that the monetary policy experiments that the Fed and every other central bank embarked on would be a failure, and would not lead to any growth and only reinflate the previous Fed induced asset bubbles. Even former Dallas Fed President Richard Fisher called QE "a massive gift for the rich" because they are the only ones to have benefited from it.