2024 Markets: The End of a Crappy Year, The Beginning of a Worse One
As my last report for 2023, I wanted to hit the big issues blunt in the face—from debt and sovereign bond markets to themes on the USD, inflation, risk markets and physical gold.
This will not be short, but hopefully simple.
No one likes hard macro facts, especially at holiday parties, so I’ll sip my champagne in silence and share my views here instead.
Powell: From Hawk to Dove to Jive Turkey in 30 Days
So, hawkish Powell is now talking about dovish rate cuts in 2024.
Powell, however, is neither a hawk nor dove but more of a jive turkey or, in the spirit of Christmas, a cooked goose.
The sad but simple fact of the matter is that our Fed Chairman, like so many of the so-called “experts,” has a genuine problem with admitting failure or speaking honestly—which is why I recommended long ago to bet against the experts…
Looming Rate Cuts? No Surprise at All
For any who have been following my blunt views on US debt markets, bond volatility, interest rate gyrations and Fed-speak vs. Fed-honesty (our first oxymoron), this pivot toward rate cuts should come as zero surprise.
ZERO.
As indicated many times, rising rates break things, and so many things have broken (banks, Gilts, USTs, the middle class…) that even Powell can’t deny this anymore.
Powell, as I wrote earlier this year, has only been raising rates so that when the denied recession that we are already in becomes an official 2024 recession according to the always too-late NBER, at least the Fed will have something to cut.
Powell, of course, is a politician, and like all politicians, has learned the art of bending truth to straighten his career and legacy.
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