![]() Take July of last year when a print showing cooling inflation, along with Powell’s comments about slowing the pace of increases, lifted sentiment. Deutsche Bank AG macro strategist Henry Allen points to six instances over the past two years when the Fed was derailed from the dovish pivot market participants were betting on. Still, it’s not the first time euphoria pegged to the Fed has arisen to foment gains in economically sensitive corners. Third-quarter S&P 500 earnings are on track to rise about four per cent, compared with estimates for a one per cent decline a month ago. Since the start of November, data on everything from hiring to consumer sentiment and retail sales have depicted an economy losing vigour, but exceeding worst-case forecasts. After three straight months of outflows, junk-bond exchange-traded funds are on track for their best month of inflows on record, according to data compiled by Bloomberg.įuelling it is a hope that has surfaced repeatedly during Fed chair Powell’s campaign to subdue consumer prices: That growth may bend, but is unlikely to break even as the central bank works to undo stimulus.
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