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Week Ahead Strategy: CPI and FOMC Prep
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Week Ahead Strategy: CPI and FOMC Prep

CPI be critical with where we are in the cycle

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Capital Flows
Sep 11, 2023
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Week Ahead Strategy: CPI and FOMC Prep
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Hey everyone,

We are back at another week in markets.

Let me zoom out for a moment and remind you where we are. On a longer-term basis, there are structural factors exerting downward pressure on growth. However, we are currently at a point in time where growth has accelerated marginally and remains resilient.

Within this context, we are nearing the end, if not at the end, of the FED hiking cycle. There is a little bit of a toss-up for an additional rate hike which is what you would expect to see at the end of hiking cycles.

In Nick Timiroas’s most recent article, he drew attention to the fact that FED governors are in agreement on holding interest rates at an elevated level but split on an additional hike. This type of disagreement among the FED is what you want to begin to see for a marginal shift to take place.

On a side note, it is always so interesting to me how some people pretend to have some “inside scoop” on the politics at the FED. Let me tell you something, unless you get FOMC decision information before it comes out, your “inside scoop” means nothing in markets.

This is actually part of the reason why it’s important to know how economic data gets priced into markets so that you can know how the market is weighing information. Check out this article I wrote on it:

The Research HUB: How does economic data get priced into the market?

Capital Flows
·
September 6, 2023
The Research HUB: How does economic data get priced into the market?

Hey everyone, I Tweeted this recently and there were some people asking for an explanation of the concept: Big picture ideas I will cover in this article: Economic Data Time Lags The market is Forward-Looking and Adjusts Expectations Expectations vs Actual Matrix

Read full story

This is another article I wrote on learning about economics. I plan to expand on in the future:

Brainstorm: Learning About Economics

Capital Flows
·
September 8, 2023
Brainstorm: Learning About Economics

I hear a lot of interesting reasons why people go to college these days. A common one is, “I need the accountability and pressure to finish things or else I would never do them.” Hundreds of thousands of dollars for accountability? Good luck with that. Going to college can be great but not because of a lack of discipline.

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Let’s get into this week (see last week’s article here: link)!

As you know, the market is currently pricing a 41% probability of a hike in November. We already have a reasonable idea that there will be a pause in September so everyone is focused on November.

This is why the CPI print is so important this week. This is what connects to the trade I mentioned previously:

Trades: FED

Capital Flows
·
September 8, 2023
Trades: FED

Hey everyone,

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Let’s expand on this a little

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