Morgan Stanley with the note. Rate of change is the most important and misunderstood idea in macromarkets:
Tapering is Tightening but Tightening began months ago.
The Fed’s pivot to begin the tightening discussion caught most by surprise, but markets began discounting this inevitable process months ago in our view. It’s exactly what the mid cycle transition is all about, and fits nicely with our narrative for choppier equity markets and a 10-20% correction for the broader indices this year. Until M2 growth is done decelerating, the transition is incomplete.