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Reflections #13 - Is the market forcing the Fed's hand?

US equities continue to rally into the FOMC meeting this wednesday seemingly in anticipation of a sign that the peak in rates is behind us.

As Nick Timiraos from the WSJ notes, Powell is caught between a rock and a hard place, either raising rates further and risk a credit crunch or pause and easy financial conditions further undermining the inflation fighting efforts.

Will Powell fold to outcries to stop hiking or will he follow the footsteps of Volcker's?

The SPX has meanwhile put in the longest upside streak since the start of 2022. With 13 weeks and +14% it easily trumps the longest streaks before with 9 weeks.

What could go wrong here?


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