- Does not see the fed going 50 BPs
- Fed follows the market
- The 2 year would have to go 25 basis points to get the Fed to tighten by 50 BP
- See 5 hikes in 2022
- Sees terminal fed funds rate at 1.50%- 1.75%
- The Fed will continue to tighten until something breaks.
- I think Fed will go into quantitative tightening
- We’re seeing some recession indicators
- Fed should have stopped QE a year ago
Nasdaq is around -92 points and S&P is down -15 points as he speaks.
- I expect
inflation to come down but the decline to be disappointing - 7.5% CPI sounds worse than 7% to me
- Risk assets have to reprice as a result of higher rates
- Credit spreads are starting to widen and will hurt stocks
- Low consumer sentiment is about time
- Near term in equities expect stability
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