United States: CPI volatility is low relative to asset price volatility. According to Morgan Stanley, dovish Fed policy chasing higher inflation is more likely to result in higher asset price inflation before we get to higher consumer inflation. And that could pose a risk to financial stability.
China: Although local state-owned enterprises (SOEs) are deleveraging, SOEs owned by the central government remain highly leveraged.
Emerging Markets: Easier monetary policy in EM is expected to boost economic activity.
Equities: There’s been no meaningful rebound in the overall US equity fund flows.
But tech fund inflows are soaring.
Rates: The Fed’s recent T-Bill purchases have been brisk. The central bank’s monthly changes in Treasury securities holdings are shown below.
Food for Thought: Republicans’ preferences for 2024:
Edited by Daniel Moskovits
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