Wednesday, Mar 22, 2023

ETH's surprising move, the *real* surprise likely from the FOMC today, some changes to this newsletter, and more...

“When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps.” – Confucius ||

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MARKET

Edge of our seat

You know, I do like a good cliff hanger. But I am really looking forward to getting past the “will he/won’t he” and focusing on the looming recession and geopolitical manoeuvring. CME futures are now pricing in an almost 90% probability of a 25bp hike, which means that anything other than that will trigger some wild market moves.

One factor suggesting that Powell could feel more confident now about a hike not breaking the system is that the KBW bank stock index has been relatively stable over the past few days. Some are interpreting this as greater reassurance that there won’t be ripple effects, but I disagree – the fact that the index is not going up could hint at a “wait and see” stance, with ripple effects already priced in after the brutal drop so far this month.

(chart via TradingView)