Who''s Afraid Of Jackson Hole?
Who''s Afraid Of Jackson Hole? By Philip Marey, Senior US Strategist at Rabobank The 10 year US treasury yield climbed above 3.00% yesterday and EUR|USD dived below parity. However, futures markets are still pricing in a “Fed pivot” in May 2023, so there is still upward potential for yields and downward potential for EUR|USD. Higher rates also meant lower stock prices and the SP500 fell by 2.14% yesterday. Speculation about possible hawkish comments from Powell at Jackson Hole on Friday has been rampant. He is scheduled to discuss the economic outlook, but markets will be more interested in his outlook for the federal funds rate. As we discussed in Lost in translation , wishful thinking by the markets has led to a much anticipated “Fed pivot” in the first half of next year. This stands in sharp contrast to the Fed’s own rate projections, published in June, which are still valid as Fed Chair Powell stressed at the July meeting of the FOMC. The rate projections show an increase of the federal funds rate to 3.4% by the end of this year, followed by a further increase to 3.8% by the end of next year.
Who''s Afraid Of Jackson Hole?
Who''s Afraid Of Jackson Hole? By Philip Marey, Senior US Strategist at Rabobank The 10 year US treasury yield climbed above 3.00% yesterday and EUR|USD dived below parity. However, futures markets are still pricing in a “Fed pivot” in May 2023, so there is still upward potential for yields and downward potential for EUR|USD. Higher rates also meant lower stock prices and the SP500 fell by 2.14% yesterday. Speculation about possible hawkish comments from Powell at Jackson Hole on Friday has been rampant. He is scheduled to discuss the economic outlook, but markets will be more interested in his outlook for the federal funds rate. As we discussed in Lost in translation , wishful thinking by the markets has led to a much anticipated “Fed pivot” in the first half of next year. This stands in sharp contrast to the Fed’s own rate projections, published in June, which are still valid as Fed Chair Powell stressed at the July meeting of the FOMC. The rate projections show an increase of the federal funds rate to 3.4% by the end of this year, followed by a further increase to 3.8% by the end of next year.