Markets primed to be hawkish on rates -- BlackRock

davfor

Here is one path the current tightening cycle could follow:

We see U.S. inflation as persistent and expect it to settle at higher levels than pre-Covid....Markets have been primed to assume hawkish intent and are quick to perceive risks of overtightening. This keeps us neutral on equities in the short run.....We are looking for signs that central banks acknowledge the trade-off of living with some inflation for the sake of preserving growth. We could see another sharp policy pivot in the coming months, this time a dovish one. This would be a catalyst to go back to overweight equities.

Markets primed

johnN

Least not 1000 points down like 2 months ago and last month lol
Everything seem more priced in...maybe bottom process formation

Very difficult tell

Maybe gentle ease in small amounts slowly good equities etf like XLE QQQM Voo lcid tsla pltr

Ust 10 yrs may have peak recently above 3% maybe little reversals soon

yogibearbull

Many confuse inflation (that is rate of change in prices) with prices themselves. The Fed would be happy if inflation settles down at a lower rate, but then we all are still stuck with high prices. We may see some declines in prices, especially some commodities, but most items, and may be most wages, will plateau at high levels.

BaluBalu

Blackrock view in the OP is the first public pronouncement I have seen of any investment house predicting that the Goldilocks 2% will be beyond reach. Now have to wait and see how pervasive this view becomes and market’s pricing of the view.