ASR in Bloomberg Opinion: ‘The pivot profits have already been made’
18th DEC. 2023
In Bloomberg’s recent Opinion’s piece, John Authers discusses the Federal Reserves changes in the last week, particularly on rates and inflation.
David Bowers of Absolute Strategy Research draws attention to the latest quarterly survey of perceived asset performance probabilities. ASR found an overwhelming consensus that rates had peaked, and that inflation was licked. They expected the Fed move in this direction, even if most of them probably didn’t expect it quite so quickly. To quote Absolute Strategy’s David Bowers:
“With investors clearly taking the view that the inflation crisis is over, they see no obstacle to an easing monetary policy. The probability that global monetary conditions will be tighter in 12-months’ time recorded a double-digit decline to just 32%, and unsurprisingly, the probability of higher fed funds and two-year yields fell to 21% and 25% respectively. Never mind what the central bankers say, investors have already discounted a policy pivot (and this was before December’s FOMC meeting).”