Great post and I agree, VVIX spiked 13% yesterday, abnormal move and might have to do with economic acceleration, the #bigflip macro narrative on Fintwit , Fed should have done 50 bps and Powell push back on loosened financial conditions, now inflation battle is going to take much longer than market expects which means higher for much longer turning this battle into a prolonged war.
Market also thought Ukraine-Russia war would be over sooner too 😅
Thanks for the comment. Lots of uncertainty after a period where tails were effectively removed due to goldilocks disinflationary forces.
We are far away from 2% and disinflation is decelerating / potentially reversing course again. It will not be a straight line down.
Those with substantial leverage at fixed low rates will appreciate this period. Including countries that outperform in terms of growth and retain some fiscal balance.
Great post and I agree, VVIX spiked 13% yesterday, abnormal move and might have to do with economic acceleration, the #bigflip macro narrative on Fintwit , Fed should have done 50 bps and Powell push back on loosened financial conditions, now inflation battle is going to take much longer than market expects which means higher for much longer turning this battle into a prolonged war.
Market also thought Ukraine-Russia war would be over sooner too 😅
Thanks for the comment. Lots of uncertainty after a period where tails were effectively removed due to goldilocks disinflationary forces.
We are far away from 2% and disinflation is decelerating / potentially reversing course again. It will not be a straight line down.
Those with substantial leverage at fixed low rates will appreciate this period. Including countries that outperform in terms of growth and retain some fiscal balance.