6% Rates Incoming? Gundlach Spars With Dimon 24 Hours Before Crucial CPI Print
Stocks rallied kind of hard, but not really hard yesterday. The Dow added 189 pts or 0.6%, the S&P gained 28 or 0.7%, the Nasdaq advanced by 106 pts or 1%, the Russell added 27 pts or 1.5% while the Transports tacked on 37 pts or 0.3%.
And it’s the “Fed will cave” story all over again. Bloomberg summed up the day best with the headline: “Stocks Bounce Back with Brewing Optimism Over CPI (
https://ca.finance.yahoo.com/news/asia-stocks-set-tepid-opening-230147384.html)”. Meanwhile, two of the biggest names on Wall Street are at odds with one another over where the Federal Reserve is going to head from here.
After all, brewing optimism is all the smart logic algos needed. Traders and algos raised the temperature in the room yesterday, betting that the forthcoming CPI report will not only weaken, but weaken beyond what the very optimistic estimates already are - thus ‘building a case’ for the Fed to stop the madness and pause further rate hikes beyond March.
At the end of the day, Doubleline’s CEO Jeffrey Gundlach stood up and said: ‘Don’t be ridiculous, the Fed? Investors need to pay 100% attention to what the bond market is saying rather than what the FED is telling you they are saying.’ In fact, he said it this way: “My 40 plus years of experience in finance strongly recommends that investors should look at what the market says over what the Fed says.”
This echoes the comments Gundlach (
https://twitter.com/TruthGundlach) made on Twitter last week when he said: “There is no way the Fed is going to 5%. The Fed is not in control, the bond market is in control.”
Meanwhile Yahoo Finance reported yesterday that Wallstreet heavyweight,CEO of JP Morgan, "Jamie Dimon Says Fed 'May Very Well' Raise Interest Rates to 6%"
(
https://finance.yahoo.com/news/jamie-dimon-says-fed-may-very-well-raise-interest-rates-to-6-195147027.html)"Jamie Dimon expects the Federal Reserve will raise interest rates higher than most officials and Wall Street strategists have forecast as the U.S. central bank continues its fight against persistent inflation.
The chief executive officer of JPMorgan (JPM), the largest consumer bank in the U.S. by assets, said Tuesday in an interview with Fox Business Network that the Fed’s terminal rate may hit 6%, a level notably above the 5% many have called for.
'Whether 5% interest rates are enough to slow inflation to where it needs to be, I don’t know,' Dimon said during the discussion at JPMorgan’s annual health-care investment-banking conference in San Francisco, citing fiscal stimulus that was 'so large and still largely unspent.'
'Is it 5%? My view is, it may very well be 6%,' he added.
This time last year, Dimon was among the first voices on Wall Street to predict – correctly – that Federal Reserve officials would deliver as many as six or seven increases to their benchmark policy rate as prices rose at a historic pace. He said the three or four hikes investors were bracing for at the time were a low estimate.
In 2022, the U.S. central bank lifted rates seven times to a cumulative increase of 4.25% to the highest in 15 years from near-zero levels. At least 75 basis points more of hikes are expected this year."
Source: Zerohedge (
https://www.zerohedge.com/news/2023-01-11/6-rates-incoming),
Quoth The Raven (
https://quoththeraven.substack.com/p/6-rates-incoming-gundlach-spars-with),
Yahoo Finance (
https://finance.yahoo.com/news/jamie-dimon-says-fed-may-very-well-raise-interest-rates-to-6-195147027.html),
Bloomberg (
https://ca.finance.yahoo.com/news/asia-stocks-set-tepid-opening-230147384.html) Follow:
t.me/g3news
6% Rates Incoming? Gundlach Spars With Dimon 24 Hours Before Crucial CPI Print
Stocks rallied kind of hard, but not really hard yesterday. The Dow added 189 pts or 0.6%, the S&P gained 28 or 0.7%, the Nasdaq advanced by 106 pts or 1%, the Russell added 27 pts or 1.5% while the Transports tacked on 37 pts or 0.3%.
And it’s the “Fed will cave” story all over again. Bloomberg summed up the day best with the headline: “Stocks Bounce Back with Brewing Optimism Over CPI (https://ca.finance.yahoo.com/news/asia-stocks-set-tepid-opening-230147384.html)”. Meanwhile, two of the biggest names on Wall Street are at odds with one another over where the Federal Reserve is going to head from here.
After all, brewing optimism is all the smart logic algos needed. Traders and algos raised the temperature in the room yesterday, betting that the forthcoming CPI report will not only weaken, but weaken beyond what the very optimistic estimates already are - thus ‘building a case’ for the Fed to stop the madness and pause further rate hikes beyond March.
At the end of the day, Doubleline’s CEO Jeffrey Gundlach stood up and said: ‘Don’t be ridiculous, the Fed? Investors need to pay 100% attention to what the bond market is saying rather than what the FED is telling you they are saying.’ In fact, he said it this way: “My 40 plus years of experience in finance strongly recommends that investors should look at what the market says over what the Fed says.”
This echoes the comments Gundlach (https://twitter.com/TruthGundlach) made on Twitter last week when he said: “There is no way the Fed is going to 5%. The Fed is not in control, the bond market is in control.”
Meanwhile Yahoo Finance reported yesterday that Wallstreet heavyweight,CEO of JP Morgan, "Jamie Dimon Says Fed 'May Very Well' Raise Interest Rates to 6%"
(https://finance.yahoo.com/news/jamie-dimon-says-fed-may-very-well-raise-interest-rates-to-6-195147027.html)"Jamie Dimon expects the Federal Reserve will raise interest rates higher than most officials and Wall Street strategists have forecast as the U.S. central bank continues its fight against persistent inflation.
The chief executive officer of JPMorgan (JPM), the largest consumer bank in the U.S. by assets, said Tuesday in an interview with Fox Business Network that the Fed’s terminal rate may hit 6%, a level notably above the 5% many have called for.
'Whether 5% interest rates are enough to slow inflation to where it needs to be, I don’t know,' Dimon said during the discussion at JPMorgan’s annual health-care investment-banking conference in San Francisco, citing fiscal stimulus that was 'so large and still largely unspent.'
'Is it 5%? My view is, it may very well be 6%,' he added.
This time last year, Dimon was among the first voices on Wall Street to predict – correctly – that Federal Reserve officials would deliver as many as six or seven increases to their benchmark policy rate as prices rose at a historic pace. He said the three or four hikes investors were bracing for at the time were a low estimate.
In 2022, the U.S. central bank lifted rates seven times to a cumulative increase of 4.25% to the highest in 15 years from near-zero levels. At least 75 basis points more of hikes are expected this year."
:link:Source: Zerohedge (https://www.zerohedge.com/news/2023-01-11/6-rates-incoming),
Quoth The Raven (https://quoththeraven.substack.com/p/6-rates-incoming-gundlach-spars-with),
Yahoo Finance (https://finance.yahoo.com/news/jamie-dimon-says-fed-may-very-well-raise-interest-rates-to-6-195147027.html),
Bloomberg (https://ca.finance.yahoo.com/news/asia-stocks-set-tepid-opening-230147384.html)
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