Mid Week Thoughts

Inflation spikes were downplayed, and it seems Jay doesn’t know if they were just a bump in the road or if a trend is emerging. Core PCE up by .2 from 2.4 to 2.6, still 3 cuts for 2024 and an upgrade to the 2024 GDP. The median dot for CY25 and 26 were both revised 25bp higher. Going forward, the “hawkish” move/risk to come from the Fed would be the median moving to 2 cuts for 24.

Overall, not much was new… all came across as dovish. Questionable comment on financial conditions? As I said to subscribers, I can only try and understand the comment from an open-minded place that perhaps he is coming from a real estate point of view (ex-prime properties). Open to hearing other opinions.

Where we are right now… ES1 +25.50, NQ1 +178, Cable -51bps (nearly unwound all its FOMC gains, despite BoE warning that they aren’t ready to cut yet), 10yr -2bp, DXY +17bps.

What could happen heading into the end of the week?