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Fed Lifts Rates, Steepens Path Through 2020 For More Hikes

Fed Lifts Rates, Steepens Path Through 2020 For More Hikes

2018, the 49th year of The Chart Seminar

Eoin Treacy's view
The first venue for The Chart Seminar in 2018 will be:

Melbourne on April 16th and 17th. . 

I will also hold an online seminar, probably in May over the course of three or four days.

There will be another Seminar in London in November and I am in initial discussions with a potential partner about organising a New York Seminar.

If you would like to attend or have a suggestion for another venue please feel to reach out to Sarah at [email protected] 

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non EU residents are not liable for VAT). Subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates. Continues in the Subscriber's Area.

Video commentary for March 21st 2018

Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.

Fed Lifts Rates, Steepens Path Through 2020 For More Hikes
This article by Craig Torres for Bloomberg may be of interest to subscribers. Here is a section:

In another change to the statement, the Fed said inflation on an annual basis is “expected to move up in coming months,” after saying “move up this year” in the January statement. Price gains are still expected to stabilize around the Fed’s 2 percent target over the medium term, the FOMC said.
The central bank’s preferred price gauge rose 1.7 percent in the 12 months through January and officials projected it to rise to 2 percent in 2019 and hit 2.1 percent the following year, the latest estimates showed. The estimates for inflation excluding food and energy, which officials see as a better way to gauge underlying price trends, rose to 2.1 percent in 2019 and 2020 from 2 percent seen in December.
“Job gains have been strong in recent months, and the unemployment rate has stayed low,” the FOMC said. The statement said that household spending and business investment “have moderated” from strong fourth-quarter readings.

Eoin Treacy's view
A dovish rate hike is what the market was hoping for and that’s what it got which eases concerns that the new Fed chair is anything other than market friendly. There had been some concern that the Fed might raise rates four times this year but that is now looking less likely. However, the upshot of the statement is that four rates hikes in 2019 is a realistic possibility and a significant negative impact would be required to stop the run-off of the balance sheet. Therefore, the outlook is not quite as liquidity friendly as might have appeared on first blush. Continues in the Subscriber's Area.

BOE's May Rate Increase Seen Locked In as Wage Growth Picks Up
This article by Lucy Meakin for Bloomberg may be of interest to subscribers. Here is a section:

Prime Minister Theresa May’s government lifted the cap on pay for more than a million National Health Service workers on Thursday. They will get a 6.5 percent pay rise over the next three years -- spelling an end of the longstanding limit on public-sector raises -- while a 4.4 percent increase in the minimum wage is also due to come into effect in April.

BOE officials, who raised rates for the first time in more than a decade in November, are preparing to unveil their latest policy decision in London on Thursday. Markets had started to price in further tightening at the next meeting in May even before the positive upturn in wage growth, while a second hike this year is also seen as probable.

“In BOE speak, higher wages point to upside risks to domestically generated inflation and improving jobs numbers point to further erosion of slack,” said Scotiabank economist Alan Clarke. “In other words, this supports the case for a May rate hike.”

Eoin Treacy's view
The collapse of the Pound in the aftermath of the Brexit vote in 2016 shielded the UK economy from what might otherwise have been a rather difficult period. However, the currency’s weakness made just about all imports more expensive. While the high street is just getting around to passing on higher import costs, the price of oil is 50% higher today than it was in July 2016. That might not be taken into account by official figures but it’s something all consumers have to deal with on a daily basis. With the NHS scoring a substantial pay increase, we can expect teachers, police and regular civil servants to make similar claims and that is before the private sector starts demand pay rises. That all points towards inflation. Continues in the Subscriber's Area.

Features of a Bitcoin Bear Market
Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section:

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

The argument proposed by hard cryptocurrency advocates is that profits accumulated in the cryptocurrency world should be simply left in the system and only reinvested in other tokens or altcoins. The basis for eschewing fiat currency entirely is that the cryptocurrency market is evolving so quickly that it is only a matter of time before digital assets have widespread real-world utility and at that point the declining value of fiat currencies can be foregone completely in favour of accumulating real assets. Continues in the Subscriber's Area.

Policy focus shifted to sustainability from stability
Thanks to a subscriber for this note from Deutsche Bank which may be of interest. Here is a section:

Eoin Treacy's view
A lik to the full note and section from it are posted in the Subscriber's Area.

China is the world’s foremost consumer of industrial resources so what happens in terms of its economic policy has a sizeable income on the fortunes of the mining sector.

Eoin's personal portfolio update March 21st 2018

Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, I repost this section on a daily basis and the title will always include the date of my most recent trade. Continues in the Subscriber's Area.

Long-term themes review March 7th 2018

Eoin Treacy's view
FullerTreacyMoney has a very varied group of people as subscribers. Some of you like to receive our views in written form, while others prefer the first-person experience of listening to the audio or watching daily videos.
The Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds. However, I think it is also important to have a clear written record for where we lie in terms of the long-term themes we have identified, particularly as short-term market machinations influence perceptions.
Here is a brief summary of my view at present. Continues in the Subscriber's Area.


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