Posts Tagged ‘ fed rate hike ’

The Fed Awakens; Creates Negative Global Market Backdrop

December 21, 2015
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The Fed Awakens; Creates Negative Global Market Backdrop

At the widely anticipated December 16th Fed meeting, the Board of Governors did the expected, and finally raised the US federal funds rate by 25 basis points. The rate-hike failed to surprise markets; the move was telegraphed and written about in advance by Jon Hilsenrath in an article on the front page of the Wall Street Journal, Wednesday morning, before the actual hike. So why did markets soar in anticipation of the hike, soar some more after the hike, and subsequently mini-crash on Thursday and Friday? No good answer on market action from CJF, but the volatility, exaggerated moves, and declining breadth, are all bearish indicators going forward. CJF takes a contrarian view to the initial goldilocks interpretation of the Fed hike; the Fed action is hawkish, creating a major obstacle...

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Crude Rally Boxes Fed Into A Corner & China PMI Weakest Since 2012

September 1, 2015
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Crude Rally Boxes Fed Into A Corner & China PMI Weakest Since 2012

This weekend’s Jackson Hole speeches, and subsequent commentary, outlined the guideposts for a Fed rate hike, potentially in September. The explosion in crude, if it holds for two more weeks, will pressure the Fed to hike. The Fed clearly highlighted the USD, employment, and oil, as drivers of inflation. The fast 10-point in rally in oil, from sub-$40, to near-$50, unwinds 2-months worth of decline. With the Fed keying off energy price declines as “temporary”, the failure to hike, in the face of the above mentioned factors swinging more inflationary, risks a credibility issue. With stronger crude (again if it holds), the August Employment Report looms very large, and will likely be the final determinant of a September rate-hike, aside from a potential market crash. On the topic of market crashes… funny...

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