Rate Hike
Not All “First Hikes” Are Equal
The market has started to price in a much faster pace of the Fed’s tightening this year. We have found more similarities than differences between recent market action and the historical patterns around the first rate hike.
The Alternate Ending?
After last year’s spectacularly successful pivot following the December 2018 plunge, the thinking is that future rate hikes are the bull market’s only threat. Perhaps that will be the case; the belief is certainly well-supported by postwar U.S. economic history, but it also reveals a shocking lapse in short-term memory.
Year Of The G.O.A.T. ?
Entering 2017, we expected a stock market “melt-up” to the 2,550-2,600 level on the S&P 500—a move we thought might run into trouble by late summer.
Markets & Election—All Risk And No Reward
The upcoming election is likely to have wide-ranging impacts on both monetary and fiscal policies and we expect election risk to overshadow the Fed policy risk for the time being.
Impact Of The First Hike - This Time Might Really Be Different
At this point, the worst outcome for the risk markets would be no hike in December.