Fynsa
The Central Bank published its September Monetary Policy Report, the famous IPoM. It came with several novelties, some of which we would like to highlight.
The expectation that the Fed will begin its monetary policy normalization process at the next meeting.
We may be approaching the point where "bad data will be bad" for risk assets.
Concerns that the Fed will be late with a rate cut, plus uncertainty over the U.S. presidential election, have driven volatility, which, as historical precedents show, is particularly sensitive at this time of year
With Fed rate cuts on the horizon, incorporating duration risk makes the most sense
The risk is that the Fed will wait too long and thereby damage economic growth and financial stability.
For the members of the board of the world's leading central bank, it is still necessary to gain greater conviction that the downward trajectory of inflation is sustainable, before initiating a downward adjustment process in the inflation rate.
Convergence between Fed and US Treasury rates is a complex issue, with important implications for the US economy.
Going forward, there remains some uncertainty associated with inflation convergence and monetary easing.
