The Fed: Dovishly Hawkish
Floating rate cuts alleviates the need for rate cuts.
Over private Xwitter on Tuesday I said the Fed would be dovish this week due to the fact TIPS break-evens had moved back down into the Fed’s comfort zone. This was no brilliant insight ahead of FED Governor Christopher Waller’s very obvious pivot Wednesday - break-evens are simply the most reliable leading indicator of FED rhetoric. Like clockwork, if break-evens move materially in either direction FED rhetoric adjusts accordingly in real-time.