Equity Risks Remain Elevated

It has been an interesting week thus far.  The much-anticipated Valentine’s CPI release combined with the Retails sales data has caused a dramatic shift in expectations for the future path of Fed policy. The market’s expectations for the terminal rate have increased from 4.75% to almost 5.25%, which is in the low end of my longstanding 5.25%-6.0% range, nearly all the easings that were priced in during the first five weeks of 2023 have now been pushed out to 2024, and the total amount ...

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