Last week, central banks took center stage and provided a great lesson that monetary policy does not always move in sync across the globe. The Bank of Japan raised interest rates for the first time in decades and ended its bond-buying policy, while the Swiss National Bank cut interest rates to support its economy during a period of weakening global demand. The Federal Reserve did neither of these things, instead opting to share an increasingly bullish outlook on the U.S. economy while simultaneously promising interest rate cuts soon. Market-based leading indicators like equity prices and credit spreads are already pricing in a soft landing with lower interest rates. Bond markets, however, still view Fed policy as tight and arguably getting tighter. This week’s chart shows that the slope of the U.S. Treasury Curve is effectively a proxy of monetary policy. It inverts when policy is tight, and it steepens when policy is loose. It’s unusual for investors and economists to be upgrading their forecasts while monetary policy is this restrictive. And when the book on this cycle is written, it will probably note that Fed policy was tighter for longer than it has been since the early 1980s. This is why we think it is far too soon to declare Mission Accomplished on bringing down inflation without causing broad economic weakness.

The Macro Week In Review

Macro Job Board

Macro Risk Strategist @ Balyasny Asset Management (New York)

The Macro Risk Strategist will work closely with select macro portfolio managers and their teams to understand and analyze their portfolio and risk. They will also develop, maintain, and leverage models for option pricing in order to better quantify unique portfolio risks.

Macro Research Associate @ JPMorgan Chase (New York)

You will be responsible for identifying key macro trends, performing high quality analyses, and maintaining a research library. In this role you will work closely with the investment portfolio and can help inform balance sheet management actions.

Macro Quantitative Analyst @ Point72 (New York)

The successful candidate will play a crucial role in supporting our quantitative research and production efforts, utilizing their expertise in Python programming and quantitative analysis to contribute to the development and enhancement of our trading strategies. 

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