I think the $5trillion fiscal flushing through the pipes as well as the deficit exploding has impacted many models and distorted the traditional Fed hike playbooks. Furthermore the extension of debt portfolios shelters corps and households from the sudden rate hike cycle from the Fed. HarksterHQ has just finished Steno’s Macro Sunday podcast and they make the point about Mexico now having a 30yr bond curve relative to start of their guests careers not being able to borrow past a yr or so .... The sensitivity to this rate hike cycle has been a key miss from the street but... it does feel like it is coming, Sweden, New Zealand and maybe UK plus Canada next
I think the $5trillion fiscal flushing through the pipes as well as the deficit exploding has impacted many models and distorted the traditional Fed hike playbooks. Furthermore the extension of debt portfolios shelters corps and households from the sudden rate hike cycle from the Fed. HarksterHQ has just finished Steno’s Macro Sunday podcast and they make the point about Mexico now having a 30yr bond curve relative to start of their guests careers not being able to borrow past a yr or so .... The sensitivity to this rate hike cycle has been a key miss from the street but... it does feel like it is coming, Sweden, New Zealand and maybe UK plus Canada next
It is remarkable how divided the investor community currently sits, almost half and half for soft landing vs. hard. never seen it like this before