top of page
Search

Chart of the Week - Premature Pivot Party

Callum Thomas

Barriers to Exit: While many wait and hope for a Fed pause or pivot - hanging on every piece of text and utterance from the Fed, the real focus should be on inflation expectations.


Longer-term inflation expectations have started to come off the boil, but shorter-term inflation expectations continue to track near record highs.


Based on our leading indicators, growth outlook (global recession risk), and commodity market outlook (bearish in my view), inflation should come down – especially into 2023…


But there remains real risk of inflation staying elevated: when inflation expectations are this high there is a greater probability that they become self-fulfilling as the sometimes long and drawn-out process of price negotiations factor in the fear of inflation.


So you can end up getting a peak in inflation, but to a new higher plateau.


In this context it is easy to understand that central banks won’t be inclined to respond to market volatility and softer growth until the inflation side of things is clearly contained (and indeed, ultimately you need to crush growth to do that).


So I think it’s still too early to be talking about a pause let alone a pivot to easing — a pivot to easing is pure hope at this point (in lieu of a crisis). This is not March 2020.


Patience and pragmatism are required to navigate this unique macro-market environment.


chart of long term vs short term inflation expectations

Key point: Great inflation expectations are a barrier to pivot.





NOTE: this post first appeared on our NEW Substack: https://topdowncharts.substack.com/




Best regards,

Callum Thomas

Head of Research and Founder of Topdown Charts


Follow us on:


 
 
 

16 comentarios


Bushra batool
Bushra batool
6 hours ago

A top-notch dog grooming service! They provide gentle care, professional styling, and excellent customer service. MobileDogGroomingWestPalmBeach.com

Me gusta

Bushra batool
Bushra batool
a day ago

Love the care and attention given to my dog! The team is skilled, professional, and truly passionate about what they do. What basic grooming services does my pet need?

Me gusta

Bushra batool
Bushra batool
3 days ago

I am hoping the same best effort from you in the future as well. In fact your creative writing skills has inspired me. dmt disposable vape

Me gusta

The Investors Centre is your trusted source for discovering the best investment platforms in the UK. Compare features and choose the best option for you. Tips for buying Solana in the UK market

Me gusta

Dorothy
Dorothy
27 feb

PoE 2 Skills - Ultimate Path of Exile 2 Skill Tree Planner


Sprunki Corruptbox | 🕹Play Free Online Corruptbox Game


Gonggi Game : Korean Jacks Rules, History & How to Play | 공기


Explore the ultimate musical horror experience in Sprunki Phase 5 !


MiSide Mods : Enhance Your MiSide Game Experience | Top Mods


Parasprunki : 🕹 Play Mod on Parasprunki


Incredibox Banana :🕹 Play Banana Mod on IncrediboxBanana


Parodybox Sprunki : 🕹Play Music Creation Game | Mods


Sprunki Pyramixed :🕹 Rhythm-Based Music Creation Game | Play Online


Maze Game - Challenge Your Mind with Exciting Puzzles


Snow Rider 3D: Unblocked Ski Adventure | Sled Rider Game


Love Tester: Online Quiz Game | Find Real Love & Soulmate Match


Penalty Shooters 2 - Ultimate Football Penalty Shootout Game


Sprunksters: 🕹️CorruptBox…


Me gusta
bottom of page