Four trades for the next 5–10 days
I’m not fighting the possibility of another Fed hike, that would be stoopid!! I’m questioning how much tightening the market needs to add beyond it.
My website (www.globalmacromethod.com) dashboard has effective funds at 3.88%, another 13.7 basis points priced for October, and a policy peak around 4.66% next September. That’s roughly three further quarter-point increases. The market hasn’t missed the hawkish message.
What interests me is the distinction between an economy strong enough to absorb another hike and one that requires the entire path already priced.
Im not looking for a recession to trade that gap. I need the next few releases to make the market less confident about the peak.
Below, I work through two rates trades and two currency trades, including what would get me involved and what would tell me I’m wrong. Subscribe to Global Macro Method for the full framework.
