The Market: Back to Squeeze Mode or on Fumes?
Powell was more neutral than I had forecasted, but more hawkish beneath the surface of his typical smooth, seemingly dovish talk.
A decisive drop in VVIX and HY CDX in the wake of Powell supports the prospect of more SPX squeezing before a large-scale correction into the September/October danger zone. But…
The economy MUST thread the soft landing needle for a sustainable squeeze.
A near-term correction into August to reset bullish sentiment remains the more likely outcome.