Executive Summary Investors Think The Fed Will Not Be Able To Raise Rates Much Above 2%  The neutral rate of interest is 3%-to-4% in the United States. This is substantially higher than the market estimate of around 2%. It…

Executive Summary The Market Has Priced An Aggressive Path For US Rate Hikes  The Federal Reserve has joined other G10 central banks in increasing interest rates this week. However, this has been well priced by both the…

Executive Summary For the Fed, maintaining its credibility with a long sequence of rate hikes that does not crash the economy, real estate market, and stock market is akin to the ‘Hail Mary’ move of (American) football.…

Executive Summary The Fed is in a tough spot. On the one hand, rising long-dated inflation expectations will incentivize it to tighten more quickly. On the other hand, the flat yield curve and poor risky asset performance point to a…

Executive Summary On a tactical (3-month) horizon, the inflationary impulse from soaring energy and food prices combined with the choke on growth from sanctions will weigh on both the global economy and the global stock market. As…

Executive Summary Will The War Stall The Expected Downturn In Inflation This Year?  The Russia/Ukraine conflict is impacting financial markets across numerous channels – uncertainty, risk aversion, growth expectations…

Highlights Chart 1A Tough Balancing Act For The Fed  In last week’s Congressional testimony, Fed Chair Jay Powell talked about his goal of achieving a “soft landing”. That is, the Fed will tighten enough to…

Executive Summary No Contagion Yet  The risk of contagion into other FX pairs from the collapse of the RUB remains contained but is rising. The main transmission mechanism will be a global rush into dollars, should the…

Executive Summary We look at the Ukraine crisis in the broader context of shocks, what we can learn from them, and how we can incorporate them into our strategy for investment, and life in general. Our high-conviction view is that the…