Play It Again Sam

Play It Again Sam (this time emphatically!)

Over the past six weeks, Fedspeak has produced a countless number of headlines that inflation is stubbornly high and rate hikes will need to continue until……date unknown.  Yes, it is super obvious the Fed cannot raise 75 bps per meeting endlessly.  And yes, the Fed does need to pause and let what they have done already work its way into the system.  The first hint where they will stop can be found in WIRP (World Interest Rate Probability).  When the market wanted a pivot, defined as rate hikes are over and cuts could happen ahead, the Fed violently dismantled those thoughts and said emphatically they will raise and stay at those higher rates for longer.  That killed the market’s animal spirits rallies and we made new lows thrice (May, June and October).  Was Friday any different?