Submitted by Eric Bush via Gavekal Capital blog,
The Fed has communicated that the plan for 2017 includes three rate hikes. The market isn’t quite buying into that plan yet.
According to Bloomberg’s WIRP function, the first meeting with over a 50% chance of a rate hike isn’t until the June FOMC meeting (73% probability of a hike).
Submitted by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,
Janet Yellen
Because the Fed believes we're at or near full employment, any potential fiscal stimulus will serve to boost inflation more than growth, according to Goldman. As such, they believe both credit and FX markets have read this correctly, but stock investors, the village idiots, haven't quite grasped what this could entail.
For evidence that the market bears are all but extinct look no further than the latest letter from erstwhile bear Bob Janjuah, in which the Nomura strategist throws in the towel in a near-term correction and predicts that "the trends over H1 2017 should be higher (especially US) equities and yields, steeper curves, a stronger USD, and mixed performance in credit (especially in the IG sphere) and EM.
Authored by Scott Kristoff via Avondale Asset Management,
We started this year with the economy deteriorating and finished it with the second interest rate increase in ten years. There were a lot of ups and downs along the way, but ultimately 2016 was defined by three key story-lines: 1) Brexit 2) The Presidential Election 3) Fed Policy.