Bilal Hafeez
Antonio Del Favero is a macro strategist at Macro Hive. He focuses mainly on the US economy and markets and G5 FX. Formerly, he worked at various macro hedge funds, including Tudor, Maniyar Capital and Brevan Howard.
Dominique Dwor-Frecaut
Summary Core and headline CPI were above market expectations. OER inflation slowed but core goods and supercore services inflation accelerated. Nevertheless, the disinflation trend continued. Market Implications I still expect the Fed to cut twice more in 2024. Another Upside Surprise September core and headline CPI prints surprised on the upside, as Sam’s model predicted […]
Henry Occleston
Summary The ECB seems almost certain to cut 25bp at its 17 October meeting. Post-NFP, the market has pared expectations of cuts over the next year, but it is still pricing four 25bp cuts in as many meetings. While September inflation took it below ECB forecasts, we are cautious that we may be seeing a […]
Dominique Dwor-Frecaut
Summary A soft landing appears less likely now than in the mid-1990s as: This time the output gap is positive against negative in the 1990s. The Federal Reserve (Fed) was much more proactive in the 1990s. The Fed has tightened more but policy transmission has been weaker this time. Deglobalization, worker power, and fiscal policy […]
Dominique Dwor-Frecaut
Summary The Fed has turned more hawkish after stronger GDP and employment data. This is unlikely to impact the central bank’s 2024 policy easing plans. Further tightening of the labour market together with the US election could make the Fed reconsider its 2025 easing plans. Market Implications I still expect the Fed to cut twice […]
Dominique Dwor-Frecaut
Summary NFPs again surprised on the upside by a wide margin. The release details show the labour market tightened in September. This may reflect the end of the 2022-24 immigration surge that allowed for disinflation with strong growth. Ahead, the Fed could start facing the traditional employment vs inflation trade-off. Market Implications I still expect […]
Henry Occleston
Summary The BoE voted (almost unanimously) not to cut in September and explicitly guided a ‘gradual approach’ to easing. However, we think recent data continues to suggest dovishness. Meanwhile, Greene and Mann (hawks) show increasing concern with consumer weakness. We are less optimistic than both on the outlook for the UK consumer based on the […]
Dominique Dwor-Frecaut
Summary The National Bureau of Economic Research (NBER) can declare a recession even without two consecutive quarters of GDP contraction, a common definition. The economic indicators the NBER uses to identify recession clearly signal the economy is currently expanding. Leading indicators do not suggest a forthcoming recession though their track record is mixed. Market Implications […]
Dominique Dwor-Frecaut
Summary The Fed has cut 50bp and lowered the FFR path despite risks of inflation stickiness. The Fed move shows strong sensitivity to employment data. The Fed is likely to cut sooner and more if NFP and unemployment are weaker than it expects but may not react to weaker NFPs if they are accompanied by […]
Macro Hive
Key Events G10 In the US, there main data are: PCE, personal income and spending – Friday. No market-moving surprise likely; Powell already told us in the presser he expects 2.7% for core PCE. Personal income and consumption are likely to continue to show robust income growth and consumption underpinned by a low savings rate. […]
Bilal Hafeez
Jay Pelosky is the founder of TPW Advisory. He has over 35 years of buy-side and sell-side financial market experience.
Dominique Dwor-Frecaut
Summary The FOMC cut more than consensus expected but roughly aligned with my expectations. The recent non-farm payroll (NFP) slowdown and buildup of policy ammunition mainly drove yesterday’s decision, thanks to the Federal Reserve (Fed’s) so far patient attitude towards easing. The Fed is likely to bring forward its planned easing if employment risks increase […]
Dominique Dwor-Frecaut
Summary Today’s Fed meeting is one of the most uncertain in years. It will be the first cut in an easing cycle, and markets are almost split between a 25bp (40% chance) and 50bp cut (60% chance). We therefore lay out possible scenarios for the Fed meeting and likely market reactions. We look at four […]
Dominique Dwor-Frecaut
Summary Today’s Fed meeting is one of the most uncertain in years. It will be the first cut in an easing cycle, and markets are almost split between a 25bp (40% chance) and 50bp cut (60% chance). We therefore lay out possible scenarios for the Fed meeting and likely market reactions. We look at four […]
Dominique Dwor-Frecaut
I am changing my Fed call to a 50bp cut this week, 100bp in 2024 and 150bp in 2025, from previously 25bp, 75bp and 100bp respectively. A key reason is that market pricing of 50bp has increased following the WSJ’s Timiraos stating that 50bp was a close call. If the Fed cuts less, they will […]
Dominique Dwor-Frecaut
Summary Core MoM CPI was above market expectations while the rest of the release was in line. OER and supercore services inflation accelerated from July while goods prices continued falling. Yesterday’s print is unlikely to shift the Federal Reserve (Fed’s) focus on employment rather than on inflation risks. Market Implications I expect the Fed to […]
Dominique Dwor-Frecaut
Summary The Fed is planning unprecedented easing during an expansion. Meanwhile, the FOMC will likely heed Waller’s call for policy nimbleness due to multiple uncertainties including: The shape of the Beveridge curve. The inflation impact of lower immigration. The elections outcome and associated economic policies. Market Implications I expect a 25bp cut this month and […]
Dominique Dwor-Frecaut
From a Fed perspective, the CPI is not this week’s most important release. This is because the CPI is unlikely to be much different from the consensus 0.2% MoM for core (see Sam’s model). More importantly, CPI and PPI are unlikely to yield a core PCE print estimate much different from the 0.2% MoM the […]
Dominique Dwor-Frecaut
Summary Relative to the June SEP, inflation is roughly in line, but growth and unemployment are tracking above the Fed Q4 2024 forecast. The FOMC’s positive outlook and intention to remain nimble suggests the easing cycle will start with one cut in September. Recent comments from FOMC members suggest the September median dot will show […]
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