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
  • 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.   
detail (7-minute read)
DeSaque Macro Research
Multi-AssetMacroeconomicsThematic (Sector/Industry)

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investm...