bearish
Asset Allocation Watch: Best not hope for cuts
460 Views20 Sep 2023 00:10
SUMMARY
- Recent developments in components of the inflation basket leave us less convinced of the path ahead for the Fed but judging by funds futures, the market is now pricing in cuts already by April 2024.
- Energy (and oil in particular) could easily wrongfoot these expectations.
- Our estimate is for a deficit just above 2mn barrels through the fourth quarter, which is enough to bring oil prices another 30% higher based on historical data.
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