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Morgan Stanley with some sensible musings.
Something is wrong. Don’t look at the US equity market and think the coast is clear. Equity indexes have benefitted from a 50bp decline in 10y real yields and a 75bp decline in the market-implied Fed peak rate since March 8. Stay defensive.
As investors approach the end of a central bank tightening cycle, they naturally wonder when the easing cycle might begin. They also wonder what possible paths the market price might reflect, given that it reflects the average of infinite possible pathways.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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