• Meanwhile in markets, talk of a pause in the Fed rate hike cycle is doing wonders for everything ranging from equities to bonds and – unfortunately – commodities too.
  • We have been off in the last few days, but as far as we can tell we have had only one Fed-speaker (Atlanta Fed chief Bostic, who is a middle-of-the-road type fellow on the dove-hawk scale) suggesting a pause in the rate hike cycle or treading cautiously at some point. Still, it is a far cry from the 75bps rumor mill earlier this month. However, the writing for a 75bps hike was on the wall when the hawks’ hawk – St. Louis Fed chief Bullard – didn’t support such a move. Alas, our call after the May FOMC that the Fed is on autopilot with 50bps of hikes at the June and July meetings and that it would be the ECB’s turn to be hawkish is turning out to be remarkably, well, spot on.

 

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