Dominique Dwor-Frecaut

Macro Hive Author

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SPECIALITY: Global Macro, Rates,

Dominique Dwor-Frecaut is a macro strategist based in Los Angeles.  She has been producing alpha generating trade ideas in FX and rates in EM and G10 at established and startup macro hedge funds in the US since 2011, including at Bridgewater.  She has also produced in depth analysis of central banks policies and procedures drawing on her experience at the New York Fed, the IMF and the World Bank as well as on the buy and sell side.  Before moving to the US she covered Asian and global EMs at Barclays capital, ABN AMRO and RBS from Singapore.  She holds a PhD in economics from the London School of Economics.

MY ARTICLES

In: Hive Exclusives | COVID-19 US

Delta Variant to Slow, Not End, the US Recovery

July 22, 2021

Summary The Delta variant will more likely slow than end the US recovery for three reasons: The vaccines work and opposition to…

In: Hive Exclusives | Fiscal Policy & Inequality US

Fiscal Policy and Growth Forecasts Do Not Add Up!

July 15, 2021

Summary The bipartisan infrastructure plan and reconciliation package under discussion are to be fully funded. Therefore, the FY2022 deficit will likely fall…

In: Hive Exclusives | Labour Market & Inequality US

CPI to Fall Well Below the Fed’s 2% Target by Mid-2022

July 08, 2021

Summary The recent drop in yields likely reflects market reassessment of US growth and inflation prospects. This is consistent with my detailed…

In: Hive Exclusives | Labour Market & Inequality US

June NFPs Show Both Demand and Supply Slowing the Recovery

July 06, 2021

Summary The Fed expects the labour market recovery to pick up in autumn. This is because it believes labour supply is the…

In: Hive Exclusives | Europe Politics

French Regional Elections Suggest Le Pen More Likely Than Macron in 2022 Second Round

July 01, 2021

Summary The regional elections mark a comeback of the traditional-right LR, more at the expense of President Macron’s LREM than of Marine…

In: Hive Exclusives | Economics US

Limited Upside to the Velocity of Money

June 24, 2021

Summary M2 velocity has collapsed, but the increase in M2 has aligned with that in other financial assets. The Fed’s response to…

Jerome Powell FOMC

In: Hive Exclusives | Monetary Policy & Inflation US

The Fed Has Fallen into a Time Inconsistency Trap, Can it Recover?

June 18, 2021

Summary The Fed could be overconfident on its growth and inflation outlook. Most importantly, the Fed has fallen into the time inconsistency…

In: Hive Exclusives | Labour Market & Inequality

End of Forbearance and Moratoriums to Have Limited Impact on Shelter Inflation

June 17, 2021

Summary Renter evictions will likely increase after the moratorium ends on 30 June. But evictions tend to lower rents, since under 20%…

In: Hive Exclusives | Economic Growth Labour market US

Slower Recovery Not Yet Fully Priced In

June 10, 2021

Summary Labour shortages are unlikely to improve until autumn. Despite this, unusually strong productivity growth could make the consensus 2021 growth forecast…

In: Hive Exclusives | Asia Economic Growth

East Asian Economies Benefit Most From the US Recovery

May 27, 2021

Summary The US trade deficit has nearly doubled since the start of the pandemic, though this partly reflects gold imports that are…

In: Hive Exclusives | Equities US

Follow the Money, Buy Stocks

May 20, 2021

Summary Fed asset purchases have led to a $3.4tn increase in banks’ assets, but more than 90% of this increase has comprised…

In: Hive Exclusives | Monetary Policy & Inflation

Far Too Soon to Lift the Dots

May 13, 2021

Summary Markets reacted to the very large CPI surprise by pricing a higher policy rate trajectory and selling equities and bonds. I…

In: Hive Exclusives | Monetary Policy & Inflation US

A Good NFP for the Fed

May 10, 2021

Summary As I expected, NFP surprised on the negative side largely due to a lack of available labour. This was shown by…

GDP Consensus

In: Hive Exclusives | Bonds

An Autumn Bond Selloff?

May 06, 2021

Summary The spread between real yields and real GDP is at its widest ever. This reflects mainly stable inflation against expectations of…

In: Hive Exclusives | Economic Growth US

Consensus Overestimates 2021 US Growth

April 29, 2021

Summary The pandemic is no longer the main source of uncertainty to the US outlook since the vaccines used there are proving…

In: Hive Exclusives | Fiscal Policy & Inequality Global

More Fiscal, Less Money: The Forthcoming Rebalancing of the Global Policy Mix

April 22, 2021

Summary The IMF expects strong fiscal consolidation in 2022. This seems unrealistic because economic normalization appears unlikely until well into 2022 outside…

In: Hive Exclusives | China Monetary Policy & Inflation

China Unlikely to Export Inflation

April 15, 2021

Summary Chinese exporters are experiencing cost pressures but seem unable to pass them on to their customers. Chinese exporters’ lack of pricing…

In: Hive Exclusives | Labour Market & Inequality Monetary Policy & Inflation

PPI Surge Unlikely to Impact CPI

April 08, 2021

Summary The recent pick up in PPI will likely be absorbed through productivity gains and stagnant wages rather than higher CPI inflation.…

Central Banks

In: Hive Exclusives | Bonds Monetary Policy & Inflation

CAD, GBP Curves Could Be Mispriced

April 01, 2021

Summary The Fed, BoE, BoC and RBA’s benign neglect of steeper curves likely reflects growth expectations that could prove optimistic in the…

In: Hive Exclusives | Fiscal Policy & Inequality US

Biden’s Gambit Will Leave Lighter Market Footprint Than Reagan’s

March 18, 2021

Summary As Reagan’s did, Biden’s budget deficits aim to change the trajectory of US society – just in the opposite direction. Policy…

US Federal Reserve

In: Hive Exclusives | Monetary Policy & Inflation US

FOMC Preview: More Signalling Than Forecasting

March 16, 2021

Summary Entering this week’s meeting, the Fed likely has three key objectives: Placing the recovery on solid footing. Strengthening the credibility of…

In: Hive Exclusives | COVID Economic Growth

Goodbye K-Shaped Recovery, Hello V-Shaped

March 08, 2021

Summary Both the headline and details of Friday's NFP data suggest economic normalization has started. Normalization is driven by re-openings and the…

In: Hive Exclusives | Bonds COVID Fiscal Policy & Inequality Politics & Geopolitics US

A Smaller COVID Relief Deal and Yellen’s Funding Dilemmas

February 02, 2021

Summary A bipartisan COVID relief deal around $700bn appears most likely. This is due to moderate Democratic senators’ de facto veto and…

In: Hive Exclusives | Fiscal Policy & Inequality FX Politics & Geopolitics US

Refounded US Multilateralism Unlikely to Restore Dollar Fortunes

January 21, 2021

Summary The dollar share of global foreign reserves declined under the Trump administration’s unilateralism. President Biden’s multilateralism alone may be unable to…

In: Hive Exclusives | Asia Bitcoin & Crypto China Monetary Policy & Inflation

2021 Grey Swan #8: China’s CBDC First-Mover Advantage Weakens Dollar Dominance

December 10, 2020

China’s retail central bank digital currency (CBDC) has received strong media attention. Yet its impact will be mainly domestic, challenging the duopoly…

In: Hive Exclusives | Politics & Geopolitics US

2021 Grey Swan #4: Biden Unites the States of America

December 08, 2020

Sturgis, North Dakota, 25 December 2021. As President Joe Biden and First Lady Jill Biden exit the Christmas service of the First…

In: Hive Exclusives | Monetary Policy & Inflation Politics & Geopolitics US

2021: A Banner Year for Risk Assets?

December 03, 2020

Summary Risk assets have a banner year ahead of them for three reasons. First, even without additional easing, monetary and fiscal policies…

In: Hive Exclusives | COVID Labour Market & Inequality US

Ongoing COVID-19 Surge To Have Limited Economic Impact

November 25, 2020

Summary The ongoing COVID surge is likely to have limited economic impact: the economy is already ‘pandemic-proofed’; the virus is less deadly;…

In: Hive Exclusives | Fiscal Policy & Inequality Monetary Policy & Inflation US

Striking a Minor Discord? The Treasury Wants Its Money Back…

November 20, 2020

Summary As we expected, Secretary Mnuchin did not renew the key 13(3) facilities aimed at credit and muni market support and has…

In: Hive Exclusives | COVID Fiscal Policy & Inequality Labour Market & Inequality US

The Fiscal Cliff Is Already Behind Us

November 19, 2020

Summary Funding for the most important Congress funded COVID programs has already largely expired. Household balance sheets remain robust. This suggests limited…

In: Hive Exclusives | Credit Monetary Policy & Inflation US

A Year-End Credit Tightening Event Ahead?

November 10, 2020

Summary Key GOP policymakers have stated that Fed lending facilities should not be extended at end-year. The incoming Treasury secretary could reverse…

In: Hive Exclusives | Economic Growth Labour Market & Inequality Monetary Policy & Inflation US

Weekly Claims Point To Further Q4 Growth Risks

November 06, 2020

Summary Weekly claims are falling because benefits are expiring, not because workers are finding jobs. Together with slower employment growth, this suggests…

In: Hive Exclusives | Monetary Policy & Inflation Politics & Geopolitics US

The US Presidential Election: The Possible Outcomes and Their Market Implications

October 29, 2020

Summary With the US economic recovery losing momentum amid political discord, it is not only the size but the timing of the…

In: Hive Exclusives | Monetary Policy & Inflation US

M2 Spike Unlikely To Fuel CPI Inflation

October 29, 2020

Summary M2 has spiked but mainly with high-income households and nonfinancial corporations, which have a high propensity to save. This suggests limited…

In: Hive Exclusives | COVID Labour Market & Inequality Monetary Policy & Inflation US

A Jobless Recovery?

October 15, 2020

Summary Even with more fiscal support, the mid-year economic bounce is likely to turn into a sluggish, jobless recovery. As a result,…

In: Hive Exclusives | Equities Monetary Policy & Inflation US

Should Investors Fear Fed Helicopter Money?

October 01, 2020

Summary Two economists have proposed a scheme where the Fed would inject money directly to households, a form of helicopter money This…

In: Hive Exclusives | COVID Economic Growth Labour Market & Inequality Monetary Policy & Inflation US

Can The Recovery Continue Without New Relief?

September 24, 2020

Market concerns over a new COVID-19 relief bill could be overdone. This is because the household savings rate is extraordinarily high, and…

Biden and Trump

In: Hive Exclusives | Monetary Policy & Inflation Politics & Geopolitics US

Biden And Trump Macroeconomic Convergence Points At Move To High Inflation Regime

September 17, 2020

The macroeconomic plans of the Biden and Trump campaigns are surprisingly similar and support a move to a high inflation regime. The…

Fed Dovish Stance

In: Hive Exclusives | COVID Monetary Policy & Inflation US

September 2020 FOMC Preview: Struggling To Enhance Their Extreme Dovish Stance

September 15, 2020

Economic uncertainty and recent signs of a slowing recovery suggest the Fed will maintain its cautious outlook and the 2021-22 Summary of…

Fed AIT

In: Hive Exclusives | FX Labour Market & Inequality Monetary Policy & Inflation US

Fed AIT, A New Salvo In The Undeclared Currency Wars?

September 03, 2020

Average Inflation Targeting (AIT) could be a net negative for the dollar as other global central banks appear unable or unwilling to…

Average Inflation

In: Hive Exclusives | Monetary Policy & Inflation US

Average Inflation Targeting: Positive For Markets, Less So For Consumer Prices

August 28, 2020

At Jackson Hole today Chair Powell announced a move to average inflation targeting, reflected in changes to the Statement of Longer Run…

In: Hive Exclusives | Monetary Policy & Inflation US

Spike In MBA Delinquencies Shows Debt Forbearance Is Having Intended Effect

August 20, 2020

The Mortgage Bankers Association (MBA) Q2 delinquency spike likely overstates the extent of delinquencies and suggests that the administration debt forbearance policy…

In: Hive Exclusives | Monetary Policy & Inflation US

The US Treasury’s Cash Management Could Undermine Fed Independence

August 13, 2020

The Treasury Government Account (TGA), which is the US Treasury’s checking account at the Fed, has become so large that the Fed…

In: Hive Exclusives | COVID Labour Market & Inequality US

US Growth Back To Full Speed Ahead?

July 30, 2020

The recovery is likely to move sideways for a month or so before restarting due to the implementation of the new COVID-19 budget package and a…

US Treasury Note

In: Hive Exclusives | Bonds COVID Monetary Policy & Inflation US

Limited Upside To Yields – Until Funding Competition Resumes

July 24, 2020

Despite the extraordinary US budget deficit, a very dovish Fed and depressed private investment suggest the Treasury could term out some of…

US Dollar

In: Hive Exclusives | COVID Fiscal Policy & Inequality FX Monetary Policy & Inflation US

Dollar Dominance In The Age Of COVID

July 21, 2020

[Bullish Dollar] The virus has catalysed more, perhaps, than it has caused. Established trends in geopolitics, economics, financial markets, public policy, and…

In: Hive Exclusives | Monetary Policy & Inflation US

Three Conditions For A Lasting Inflation Acceleration

July 16, 2020

[Bearish Bonds, Stocks, USD / Bullish TIPS & Gold] A spike in inflation is likely when the US economy normalizes. Beyond that,…

In: Hive Exclusives | COVID Monetary Policy & Inflation US

Will Mass Immunization Turn Out Negative For Markets?

July 09, 2020

Mass immunization against COVID-19 could begin as early as mid-2021 – sooner than policymakers and market participants expect. And when it does,…

In: Hive Exclusives | COVID Monetary Policy & Inflation US

Is The Fed Moving Away From LSAPs?

July 02, 2020

The Fed could be moving towards an operational framework where it directly targets access to credit in the real economy rather than…

World Leaders

In: Hive Exclusives | COVID Global Politics & Geopolitics

Five Major Geopolitical Risks Over The Next 12 Months

July 01, 2020

COVID will have a long-term impact on the global economy, but other geopolitical risks could also have significant macro and financial market…

In: Hive Exclusives | COVID US

New US COVID-19 Cases Are Rising, But New Lockdowns Remain Unlikely

June 25, 2020

The growth in COVID-19 cases in the US is likely to accelerate further, but new blanket lockdowns from states appear unlikely: the virus has…

FED BALANCE SHEET

In: Hive Exclusives | Monetary Policy & Inflation US

Fed Balance Sheet Expansion Could Disappoint

June 18, 2020

Based on continued market normalization and unchanged Fed policies, reserves are headed towards $4.3tn at end-2020. This could clog banks’…

China doesn't need Hong Kong

In: Hive Exclusives | Asia China FX US

China No Longer Needs HKD

June 04, 2020

The HKD peg to the USD is central to Hong Kong’s role as a global financial centre. This role has served the mainland well after the 1997 handover but…

In: Hive Exclusives | Asia China Politics & Geopolitics US

President Trump China Press Conference: More Bark Than Bite, So Far

June 01, 2020

Bottom line: markets rallied on Friday’s Trump press conference on China as it turned out more a list of threats than actual actions and Trump did not…

In: Hive Exclusives | Economic Growth Labour Market & Inequality Monetary Policy & Inflation US

Inefficient COVID-19 Relief Unlikely To Stop V Shaped Recovery

May 28, 2020

The US administration’s initial policy response to COVID-19 has provided the majority of workers with replacement income larger than their previous…

In: Deep Dives | COVID Economic Growth US

Supply-Side Perspectives On The Economic Impact Of COVID-19

May 27, 2020

Most of the discussion on the economic impact of COVID-19 has focused on demand destruction. Yet two recent academic papers…

In: Hive Exclusives | COVID Economic Growth Labour Market & Inequality

U And V Shaped Risks Compared

May 21, 2020

In this note I list my top three risks of V (fast) and U (slow) shaped recoveries. On balance, V seems more probable, mainly due to the US electoral…

In: Hive Exclusives | Monetary Policy & Inflation US

The Fed’s Constructive Negative Rates Ambiguity

May 12, 2020

Several Fed Funds futures contracts began pricing above 100 last week, implying that markets were pricing in a small negative Fed Funds rate in…

US Credit Crunch

In: Hive Exclusives | COVID Credit US

Could A US Credit Crunch Bring About A Debt Holiday?

May 07, 2020

Despite its exceptional size, US policy support could disappoint due to poor targeting. With presidential elections in November, this suggests further…

COVID Stimulus

In: Hive Exclusives | COVID Monetary Policy & Inflation US

A Pause In Policy Support Could Provide A Buying Opportunity

April 30, 2020

A May pause in new policy initiatives against a backdrop of slow support to the real economy creates downside market risks. Over the longer run…

COVID News

In: Hive Exclusives | COVID

Incremental COVID-19 News More Likely Positive Than Negative

April 23, 2020

Incremental news on COVID-19 is likely to point towards greater healthcare capacity and lower mortality rates than current consensus. On balance…

COVID Intensity

In: Hive Exclusives | COVID Equities Global

Using COVID Intensity To Pick Equity Winners

April 17, 2020

This week, I build an index of epidemic intensity that is negatively related to equity market performance, both in EMs and DMs.  The index relation with…

Positive Risk

In: Hive Exclusives | Credit Equities FX Global

A Positive Risk (Lower VIX) Scenario For Q2

April 09, 2020

I am bearish volatility based on the feasibility of restarting economies without rekindling the epidemic and on the policy response…

US COVID Scenarios

In: Hive Exclusives | COVID US

How Many COVID Deaths Could The US See?

April 02, 2020

The White House Coronavirus task force briefing on 31 March followed the cardinal rule of successful market strategists: provide a number or a date…

Social Distancing

In: Hive Exclusives | COVID Global

An Alternative Measure Of COVID-19 Containment

March 31, 2020

The daily release of countries’ COVID-19 case counts consistently makes front page headlines despite conveying little information. By contrast…

Pandemic Preparedness

In: Hive Exclusives | COVID Global

We Can Protect Both Lives And Livelihood

March 26, 2020

President Trump’s announcement that he plans on having the US economy re-open by Easter has proved controversial. Yet whether or not we agree…

In: Hive Exclusives | COVID Economic Growth Global Labour Market & Inequality

3 Conditions For A V-Shaped Recovery

March 19, 2020

A sharp, globally synchronized, COVID-19-related slowdown is underway. Because most governments have been slow to respond, their policy options…

Pandemic Preparedness

In: Hive Exclusives | COVID Global

What’s Stopping Early COVID Intervention

March 12, 2020

Implementing a worldwide, synchronized, two-week long strict quarantine could end the COVID-19 global pandemic. About 99% of infected individuals…

Bull Market Corona

In: Hive Exclusives | Bonds COVID Equities Labour Market & Inequality

A Bullish Market Case From COVID-19

March 03, 2020

Markets surged on Monday following global announcements of policy easing. This is in line with my 13 February expectations that Covid-19 was unlikely…

Jerome Powell Speech

In: Hive Exclusives | Bonds COVID Monetary Policy & Inflation US

COVID-19 And The Fed: Our Currency, Our Problem Too

February 27, 2020

The Fed will probably ease in March, in part to help China avoid a hard landing. Fed funds futures are currently pricing about 1/4 chance of a 25 bp cut…

Coronavirus Pandemic

In: Hive Exclusives | Asia China Economic Growth EM Labour Market & Inequality US

The Long-Term Consequences Of A COVID-19 Global Pandemic

February 20, 2020

A global COVID-19 pandemic would further accelerate the post-financial crisis deglobalization. China’s long-term growth rate could be hit the hardest…

Total Virus

In: Hive Exclusives | COVID Credit Economic Growth Equities Labour Market & Inequality Monetary Policy & Inflation

Novel Coronavirus Unlikely To Cause TINA’s Demise, For Now

February 13, 2020

Bad news related to the outbreak of the Novel Coronavirus, COVID19, is unlikely to be fully priced in. Yet over the next few months…

Australia Policy

In: Hive Exclusives | Fiscal Policy & Inequality FX Labour Market & Inequality Monetary Policy & Inflation

Why Australia Needs More Policy Support Than Canada

February 06, 2020

For the first time in 20 years, Australian yields have fallen through Canada’s.  In addition, the AUDCAD cross is at its lowest level since the crisis…

Household Debt

In: Hive Exclusives | Labour Market & Inequality US

The Cracks In US Households’ Finances

January 30, 2020

US credit scoring is facing a revamp. Fair Isaac (FICO) recently announced changes to consumer credit scoring that will raise the credit core of…

In: Hive Exclusives | Monetary Policy & Inflation US

How The Fed’s “Not QE” Boosts Risk Markets

January 21, 2020

The Fed is moving to a RP (repo) operational target, which requires a bigger balance sheet. In the context of the ongoing risk rally this is likely to…

In: Hive Exclusives | Economic Growth Equities Labour Market & Inequality US

Cracks In The US Labour Market Could Pressure Equities

January 14, 2020

The latest US labour market data showed a further slowdown in labour income. This will likely drag down consumption growth…

China Great Wall

In: Hive Exclusives | Asia China Economic Growth EM Labour Market & Inequality

China’s True Growth Could Be Half What You Think

November 21, 2019

China’s GDP data release always generates great market excitement despite rarely straying more than 25bp below or above the government target…

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