Sticky Core & Right Tails

Debt ceiling negotiations turned out to be a lot less dramatic than many had anticipated – still to come are congressional votes – but once the smoke clears we’re left facing down the back half of the year with many of the questions investors had in January not much closer to being answered – it looks like we have seen peak headline inflation but core is proving to be stickier than many had anticipated. That has led to a reassessment of the policy outlook for the back half of the year – we discuss updated views on the Fed, BoE, ECB, BoC and RBA. The other side of the story is a buoyant equity market, seemingly impervious to hikes getting priced out. That may be puzzling or frustrating for macro investors but we discuss how the under-owned right tail in equities may signal more pain to come.Participants:Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics Izaac Brook (Desk Strategy), US Rates Strategy Analyst Simon Deeley (Desk Strategy), Canada Rates Strategist Robert Thompson (Research), Macro Rates Strategist Elsa Lignos (Desk Strategy), Head of FX Strategy Amy Wu Silverman (Desk Strategy), Head of Equity Derivatives Strategy * Research Analyst opinions are their published views, independent of those expressed by Desk Analysts