Investors had all weekend to chew on what the holders of American interest rates had to say last week and what it means for the market in what is a historically tough stretch.
Macro Man, an anonymous blogger who consistently churns out the goods, wrote of the “absurdity” of the Fed’s latest meeting and why the central bank’s credibility is in bad shape. As a bonus, he even wrote his thoughts in the third person, for some added gravitas.
“The next few weeks will tell the tale of how the market really views the Fed. If Macro Man’s views on the impact of Fed uncertainty are correct, then risky assets should struggle,” he said. “Policy error normally gets punished in one form or another, sooner or later. The conundrum this time around is that the punishment (lower risky asset prices) will only perpetuate the error.”
Of course, when risk assets start to fade, gold perks right up. Add in a technical signal that screams for more whipsaw trading action, and the safe havens start to look rather inviting. See both “the chart” and “the call” for some wonky reasons to be cautious.