Warsh No Hike in June Is a Rate Cut

Steven Blitz argues that the Fed is falling behind the curve and that Kevin Warsh's expected decision to hold rates in June constitutes a policy ease during a period of accelerating bank lending.

Key Takeaways

• 1.The incoming Fed Chair (Warsh) choosing not to hike in June effectively acts as a monetary ease because inflation risk is rising while growth remains steady.
• 2.Bank lending is accelerating significantly (8% SAAR), suggesting the cost of funding is currently too low to contain inflation.
• 3.The multi-year bull market in equities is likely over as bond yields rise to levels that compete directly for capital.

Table of Contents

• Macro and Strategy Ideas
• WARSH — NO HIKE IN JUNE IS A RATE CUT
• The views expressed here may not reflect the GlobalData TS Lombard House View
• Authors
• Disclaimer

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