USD is Mostly Firmer Ahead of Jobs Report for which the Market is on Notice for Downside Risks: Overview: The US dollar is firm. The only G10 currency that is stronger today is sterling, which is recovering from yesterday's sharp losses and the UK's… https://t.co/wCQC6Y9Y28
YIKES! What an UGLY ADP report -33K private sector jobs cut ("experts" were looking for +99K). Las month also revised 🔻 DOWN
Are you scared for Non-Farm Payrolls tomorrow?
Trump on a question on Fed Chair Powell: He’s a stupid person— stubborn mule…I've instructed my people not to do any debt beyond nine months or so. Get this guy out.. if I think somebody's going to keep the rates where they are, or whatever, I'm not going to put them in. I'm going to put somebody that wants to cut rates. There are a lot of them out there
*POWELL: WE WOULD EXPECT TO SEE MEANINGFUL TARIFF INFLATION EFFECTS JUNE, JULY, AUGUST
*POWELL: IF WE DON'T SEE THAT, THAT WOULD LEAD TO CUTTING EARLIER
Good Morning!
📉 Traders waiting on Tehran response - Strait of Hormuz
🇺🇸 USD ⬆️ catches safe haven bid on Iran conflict
🇪🇺 EUR🔻 EZ Mfg PMI revised down from France
🇬🇧 GBP🔻 despite upward rev to PMI
🇨🇦 CAD🔻losses moderated by oil rise
🇦🇺 AUD🔻slight uptick in PMI
🇯🇵 JPY 🔻stronger PMI
🇳🇿 NZD 🔻 leads slide to 2mo lows
⚠️SUMMARY OF FED FOMC STATEMENT:
1. The Fed delivered a ‘Dovish Pause’.
2. The FOMC left interest rates unchanged at 4.50%, but still signaled two cuts in 2025.
3. Fed members see the benchmark rate falling to 3.9% this year. The rate-cut outlook for 2026 and 2027 were also unchanged at 3.4% and 3.1%, respectively.
4. The FOMC downgraded its collective outlook for economic growth and gave a bump higher to its inflation projection.
5. In addition to the rate decision, the Fed announced a further scaling back of its “quantitative tightening” program in which it is slowly reducing the bonds it holds on its balance sheet.
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Fed officials marked *down* their forecasts for GDP and *up* their forecasts of inflation and unemployment, but...
Almost all of them see the risks to the downside on growth
And almost all of them see the risks to their unemployment and inflation forecasts to the upside
⚠️ Surprising shift higher in '25 Fed dots:
Hawkish camp (1 or fewer '25 cuts) = 8 vs. 4 prior
Neutral (2 cuts) = 9 vs. 10 prior
Dovish camp (>3 cuts) = 2 vs. 5 prior
Passive Fed amid macro uncertainty. One official showed their hand by lowering LR dot (recession fears) $USD
Stanley Druckenmiller is the greatest investor ever.
His fund returned 30% annually for 30 years without a down year.
Yesterday, I re-watched his interview with Nicolai Tangen.
Here are the 7 things you can't miss: 🧵
(No. 5 is critical)
So much for the one-way train to reacceleration...
January Retail sales missed bigly, slamming the brakes on the reacceleration narrative.
While Dec '24 was revised up, January's decline more than offset those revisions.
The big loser was online sales, but nearly all control group categories declined in Jan after all posting solid gains in Dec.
More details in the 🧵