The Fed | Bridgewater: “The Fed is in a box”
Discussion
Regular readers of The WOTE know that Bridgewater is a key part of the process, as nobody in the market has a better bottom-up, real-time view of economic activity. BW releases key updates of their market view on a lag, and the latest update just so happen to be published within hours of The WOTE’s most recent post - it is the perfect addendum to The WOTE’s outlook for markets through Q1 2024, so it deserves its own post.
The entire update is a must-listen, but starting at minute 30 is the key section where Co-CIO Greg Jensen details the fact the Fed is in a box and will not start easing policy until a pretty major recession is well underway.
To reiterate the message from yesterday: This equity market rally currently underway will ultimately be viewed as one of the greatest short set-ups in market history - only obvious with the benefit of hindsight, of course 🙄.