Dominique and Antonio examine the Federal Reserve’s likely trajectory under Chair Walsh, with Dominique forecasting that the Fed will remain on hold for the remainder of the year. They analyse slowing wage growth, improving trade balances, and falling energy prices as evidence against economic overheating, despite a hawkish faction within the FOMC that recently pushed for a rate hike. The discussion highlights Walsh’s shift away from Powell-era consensus-building toward a “good family fights” model, which empowers individual members and potentially tilts the Fed’s reaction function toward more hawkish outcomes. As focus turns to the upcoming CPI report and Walsh’s semi-annual testimony to Congress, Dominique suggests that if his “hold” forecast is wrong, the new institutional structure makes a surprise hike more probable than a cut.
(This market commentary has been prepared by Macro Hive Limited (“Macro Hive”). This market commentary is made available to you for general information purposes only and does not constitute a recommendation of any investment product, to act, or not to act, in any way whatsoever and does not represent an offer or the solicitation of an offer to buy or sell any securities, financial products or related financial services or to adopt an investment strategy. The market commentary is provided on an ‘as is’ and ‘as available’ basis. To the fullest extent permitted by applicable law, Macro Hive excludes all representations or warranties of any kind, including any implied warranty of merchantability, satisfactory quality or fitness for a particular purpose. Macro Hive excludes all liability for any losses (whether direct or indirect) that may be suffered as a result of reliance on this market commentary. The contents of this publication are confidential. Macro Hive retains all ownership, title, rights and interest in the market commentary. You must not copy or redistribute any part of this market commentary (in whole or in part) to any other person without the express written authority of Macro Hive. Although information in this market commentary has been obtained from sources believed to be reliable, Macro Hive does not represent or warrant the suitability, accuracy or completeness of the material and such information may be incomplete and/or condensed. Any rights existing in such information shall remain the property of the source. Macro Hive has no obligation to update or correct any information. If markets or performance are discussed, past performance is not a reliable indicator of future results, and forwardlooking statements involve risks and uncertainties. In the event that you are a US person (as defined by the SEC or CFTC) this message is sent by Macro Hive Markets, a trading division of GFI Securities Limited and is also subject to the disclaimers available here: Sales – GFI Group)
