This note aims to share our research team’s internal checkpoint process in evaluating the current state of the economy as it pertains to markets. The pages that follow will have familiar content for those who follow our work, but with the added benefit of connecting the dots across all the economic and financial data our systems use to make portfolio decisions.
Synthesis: The surge in global energy prices, coupled with resilient US nominal activity, is likely to put material pressure on the Fed to begin a monetary policy hiking cycle. These pressures will continue to weigh on US Treasuries until we see clear signs of inflation -induced demand destruction.
Read all the data driving this assessment below:
Until next time.