As for the FOMC, it is likely that the Fed will remain dovish or cut rates. The markets have priced in a cut by the end of 2019. I personally find it unlikely that will happen at this meeting. There are two reasons to believe that the Fed will remain dovish:
1. Even though the US economy has 'picked up' in the sense that the data is much better respective to the global economy, inflation is still respectively low as many Fed speakers have mentioned. It is clear this is their focus, and they won't raise rates, or increase hawkish rhetoric unless this changes.
2. Economic data is abysmal for the rest of the world by comparison. Bund rates have returned back to flirting with negative territory, and EU data is just barely above recessionary. Any hawkish tone from the Fed would completely wreck the world economy
stocks and bonds have been correlated lately which means that they are pricing in these cuts. Until further notice we are in buy the dip mode in both
The Kovach momentum indicators have been solidly positive, and until any of these register a change, we are in buy-the-dip mode.
1. Even though the US economy has 'picked up' in the sense that the data is much better respective to the global economy, inflation is still respectively low as many Fed speakers have mentioned. It is clear this is their focus, and they won't raise rates, or increase hawkish rhetoric unless this changes.
2. Economic data is abysmal for the rest of the world by comparison. Bund rates have returned back to flirting with negative territory, and EU data is just barely above recessionary. Any hawkish tone from the Fed would completely wreck the world economy
stocks and bonds have been correlated lately which means that they are pricing in these cuts. Until further notice we are in buy the dip mode in both
The Kovach momentum indicators have been solidly positive, and until any of these register a change, we are in buy-the-dip mode.
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