FYI: This week's Bespoke Report newsletter is now available for members. Equity markets surged despite short term interest rate markets pricing near-certainty of multiple Fed rate cuts this year. How can an economy so bad that the Fed needs to cut mean stocks go up? We take a look around for some answers. We also review just how dovish the Fed has been relative to what markets have been pricing of late. While the domestic economy has definitely slowed down from the torrid pace of 2018, even the disappointing nonfarm payrolls number today paints a different picture than assumptions of multiple cuts from the front end. The global economy is less constructive, but there's a difference between weakness and a recession panic, as we show. Finally, we present an argument for why Fed rate cuts may not be necessary for the economy to stabilize and start to pick up again thanks to negative feedback loops.
Regards,
Ted
https://www.bespokepremium.com/interactive/posts/think-big-blog/the-bespoke-report-negative-void-coefficient
