It’s the Economy Stupid

Published on: May 14th, 2019

How the economy performs later this year will determine the Federal Reserve’s reaction function, and their current “patience” could run thin. Trump’s White House may not be so patient and unlike Clinton, who coined the phrase, is likely to emphasise the pejorative.

Comments

  • CA
    Carlos A.
    14 May 2019 @ 16:29
    0 3
    Julian is still talking based on the theory of trowing the coin 50% 50% chance.
    • AW
      Agus W.
      15 May 2019 @ 02:35
      4 0
      Actually he is waiting for market to give him the signal before committing a position which is smart IMO.
  • CA
    Carlos A.
    15 May 2019 @ 01:54
    5 1
    ... in my 20 years in financial World I had never seen the quality of work and the excellent track record of Julian and Raoul, I really congratulate you. Macroinseders has an excellent cost benefit. CARLOS OSORIO
    • BR
      Brian R.
      16 May 2019 @ 00:49
      2 0
      Where is the track récord?
  • CA
    Carlos A.
    15 May 2019 @ 03:14
    2 0
    I'm on the pain train, i remain firm that this market it's going to blow up. Was my choice.
  • AS
    Alan S.
    15 May 2019 @ 03:14
    5 0
    This type of presentation is precisely why I subscribe: The set-up is presented, the anticipated potential outcomes explained, and when the trigger is pulled, either way, you know why it has been pulled.
  • KH
    Kavi H.
    15 May 2019 @ 13:25
    0 0
    Julian, what do you think of the possibility of a continuation of the topping process ( the topping process takes longer)?... i.e. a late May short term low that sends markets back up to retest the highs again.... and then finally a resumption of this bear market later in June.
    • JB
      Julian B. | Contributor
      23 May 2019 @ 17:18
      1 0
      Kavi the trade talks really complicate things and I'm not hearing anything good. That said my bias is to buy the dip but I'm waiting for the Fed to panic and deliver cuts and further easing
  • JS
    J S.
    15 May 2019 @ 17:24
    0 0
    Hi Julian. Can monetary policy / Fed prevent the next recession? If yes, what changed given that now they can?
    • JB
      Julian B. | Contributor
      23 May 2019 @ 17:16
      0 0
      Possibly if they are robust enough. But my bet is that a combination of weak growth and stocks will also push Trump/Dems to do a deal on infrastructure spending
  • MG
    Miguel G.
    15 May 2019 @ 17:51
    1 0
    Julian you argue in order to elongate this business cycle the fed needs to act and act now. By acting do you mean just cutting rates or are you looking for them to re launch QE?
    • JB
      Julian B. | Contributor
      23 May 2019 @ 17:13
      1 0
      If necessary both. So above
  • DB
    Daniel B.
    17 May 2019 @ 03:20
    1 0
    Hi Julian - the Fed just “trial ballooned” the idea of an interest rate peg by buying certain dated securities at lower yields to control the yield curve - a la BoJ yield curve control. If this were to happen, do you have thoughts on what parts of the curve would be targeted and whether this follows after cutting rates to zero in a crisis?
    • JB
      Julian B. | Contributor
      23 May 2019 @ 17:12
      2 0
      Hi Daniel my guess is that it comes after rates cuts and possibly more QE. As for where they target its a bit early and I haven't heard anything specific.
  • MG
    Miguel G.
    17 May 2019 @ 18:00
    4 0
    I agree with Julian that the fed will eventually spark some kind of inflationary wave, but as I watch copper, EM and the dollar trade it looks like there is one last deflationary wave left in the chamber. Maybe we get a deflationary wave in the summer that gets the fed to cut rates in Sept. once equities and commodities are on the floor and reflate markets in to year end? I guess I'm more in the camp that the fed will be slower to act UNTIL it is as clear as day that deflation is knocking equities and commodities lower which will then get Powell to finally top the dollar and begin a wave of inflation I think we should all be buying hand over fist. Minsky moment this summer and some kind of buyable bottom late August/Sept on reflation when the fed finally cuts AFTER the deflationary wave.
    • JB
      Julian B. | Contributor
      23 May 2019 @ 17:08
      3 0
      I couldn't have put it better myself
  • DY
    Dmytro Y.
    26 May 2019 @ 14:02
    0 0
    Julian, you seem to be bullish on dollar and at same time suggest buying Gold? something does not add up. Could you please clarify.i would still imagine gold in USD go lower if USD (DXY) breaks higher. Thanks for your views.