Fed Monetary Policy Rate Change over 6 Months Prices in (Futures) vs. Actual

Fed Monetary Policy Rate Change over 6 Months Prices in (Futures) vs. Actual Actually, the Fed decides when to raise rates, but the market decides when to cut rates. This chart shows that rate expectations are highly predictive six months in advance. You may also like “Markets Have Accurately Priced in Cuts before Easing Cycles…

Markets Have Accurately Priced in Cuts before Easing Cycles Begin

Markets Have Accurately Priced in Cuts before Easing Cycles Begin Orange lines mark days when markets priced in a rate cut. In recent history, it occurs between 33 and 281 business days before fed cut. The average is 120 business days. So, the Fed’s rate cut could take place in September 2019. You may also…

Central Banks Balance Sheet

Central Banks Balance Sheet Despite years of monetary policy easing, central banks are still missing their inflation goals. Image: Financial Times

U.S. Dollar and Weak Global Growth

U.S. Dollar and Weak Global Growth This spreadsheet shows that Fed policy easing can weaken the U.S. dollar in times of weak global growth. Image: Goldman Sachs Global Investment Research

China Property Sales and Total Credit Growth

China Property Sales and Total Credit Growth According to Gavekal, Chinese monetary policy is still in a moderate “selective easing” mode. Image: Gavekal, Macrobond

The Market is Almost Wrong about What the Fed Will Do

The Market is Almost Wrong about What the Fed Will Do Actually, the Fed decides when to raise rates. But the market decides when to cut rates: “Markets have accurately priced in cuts before easing cycles begin.” Keep in mind that rate cut expectations are highly predictive six months in advance. You may also like “Fed Policy…