For equity markets, not a bad thing for the Fed not to cut because of strong growth and inflation stubbornly in the 3% to 4% range. It is a bad thing for the FOMC to ignore whether the real funds rate is high enough to generate the slow walk to 2% inflation. steven blitz

Marriage between the FOMC and disinflation is heading for a divorce “Participants generally noted their uncertainty about the persistence of high inflation and expressed the view that recent data had not increased their confidence that inflation was moving sustainably. steven blitz

“.. Largely because of the rise in equities .. and the deleveraging of household balance sheets in the past decade, asset/liability ratios have not been this high since the late 1990s.' 🇺🇸

- GlobalData.TSLombard steven blitz Daily Chartbook

For equity markets, not a bad thing for the Fed not to cut because of strong growth and inflation stubbornly in the 3% to 4% range. It is a bad thing for the FOMC to ignore whether the real funds rate is high enough to generate the slow walk to 2% inflation. steven blitz

Index concentration: not just a US problem. Extremes of concentration – not just in the US but also in the Euro Area, leave the market vulnerable to poor results from the giants, especially Nvidia. Freya Beamish

Investors are turning more cautious on US equities, especially Tech: speculative positioning in the Nasdaq is now net negative, while long bets on the VIX are building up. Andrea Cicione and Skylar Daithi Montgomery Koning

US equities have marginally lagged other markets so far this year. This is especially true in the Tech sectors, with IT-heavy country indices outperforming the Nasdaq. Andrea Cicione and Skylar Daithi Montgomery Koning

The Fed created this great bull market in equities through QE, a market too rich by most measures, but the Fed is unlikely to reverse course, hoping instead that the economy grows into these broad high valuations.

No US recession, but buyout equity market key to continued expansion; something the Fed appears keen on doing. Jobs and income are always key drivers of consumer spending, but equities have become increasingly important across all wealth cohorts

“.. IS THE EXPANSION JUST GETTING STARTED? .. Equity market reflects earnings, earnings lead to hiring .. Nothing unusual here, typical start-of-cycle dynamics.” 🇺🇸

- GlobalData.TSLombard

GlobalData.TSLombard P.S. all is not lost. At least someone at the ECB is paying attention:

”If we hold them [high interest rates] for too long, we might put the recovery at risk and delay the associated cyclical rebound in productivity growth” (Piero Cipollone, 27 March)

ecb.europa.eu/press/key/date…

EA productivity rebound but will policymakers spoil it? Very important thread by Davide Oneglia

US equities have marginally lagged other markets so far this year. This is especially true in the Tech sectors, with IT-heavy country indices outperforming the Nasdaq. Andrea Cicione and Skylar Daithi Montgomery Koning