Market Rundown | Goldman calls for 2 Large Rate Hikes in May and June

Jobless claims come in low

Apr 07, 2022

∙ Paid

SocGen joins the bandwagon: "We change our call to a 50bp hike in May, now with even faster inflation trends"- Source

Market Rundown:

Good Morning: The dollar is down 9 ticks. Bonds are slightly softer. Stocks have bounced from yesterday’s post FOMC minutes release trouncing. Stock hopes were dashed by unrelenting hawkishness from that meeting notes release. Gold started out flat, but is getting strong during US hours, up $12 now with silver up only 15cents. It is all stagflation/recessionary behavior today.

Crude oil also bouncing from a big selloff yesterday. Demand destruction narrative is taking hold on top of the coordinated selling by everybody and their cousin globally. But still Oil persists. Peace in Ukraine would be the crater news they want/need now.

Jobless claims came out lower than expected as we wrote this, only adding fuel to the fire of rate-hikes now.

 Initial Claims 166K, Exp. 200K

3 pm Consumer credit Feb. $15 billion $7 billion

The market continues to disbelieve the Fed on this, only to get smacked down periodically. The S&P could drop 1000 points and the Fed will do nothing in our opinion. It just will not be permitted to drop quickly without a hardstop.

Long term rates are just too low to stop housing asset inflation. If mortgage rates don’t rise more ( they will), then down payment requirements will is our bet.

Good luck

Post Excerpt: Fed to deliver 50bp rate hikes May and June

Globally, we expect trend-like real GDP growth of 3.2% in 2022 as the sizable drag from the Russia-Ukraine conflict…
In the US, we expect below-consensus full-year growth of 3.1% in 2022, driven in large part by a sizable fiscal drag and at least a modestly negative impulse from financial conditions….
We expect core PCE inflation to fall to 4.0% by end-2022 as the surge ….
We see the unemployment rate falling to 3.3% by end-2022…
We expect the Fed to deliver 50bp rate hikes at both the May and June FOMC meetings and 25bp hikes at…
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