Reported 2 months ago
Macro strategists at Gavekal Research warn that investors should prepare for a potential 'nasty shock' if the Consumer Price Index (CPI) report on Wednesday shows higher-than-expected inflation. Currently, markets anticipate aggressive interest rate cuts by the Federal Reserve, but a rise in inflation could lead to rapid adjustments in investor positions. Gavekal highlights that while some analysts foresee factors pushing inflation above the Fed's 2% target, others believe a contraction in money supply could help contain it. If inflation surprises, the Fed may delay rate cuts, impacting the dollar, bond yields, and equities.
Source: YAHOO