United States

Hawkish Fed in 2022: Boosting the Importance of Stock Picking as Valuations Receive Less Support

Cross Asset Strategy
280 Views, 08 Jan 2022 03:30
EXECUTIVE SUMMARY
  • Fed Chair Powell eyes March to raise the federal funds rate, but pressure to delay has risen. The Fed is keen not to fall behind the inflation curve in 2022.
  • Inflation forecasts could be critical in determining whether Fed policy guidance requires further hawkish adjustment. Labour market developments will, however, not be entirely overlooked in terms of adjusting policy settings. 
  • Fed policy lowered the equity risk premium and boosted equity valuations. Lack of Fed intervention in US Treasuries means outsized US equity portfolio gains will depend on stock picking.   
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DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investm... 

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