Should you start worrying about Trump trade vs Kamala trade? Arnab Das answers
Arnab Das, Global Macro Strategist, Invesco, says we have to look further ahead and think about the American election. Many in the market are discussing the Trump trade versus the Kamala trade. The Trump trade further out might be lower growth, somewhat higher inflation than otherwise and the Kamala trade might be kind of a more reflationary trade, higher growth and somewhat higher inflation. Either way, the Fed would be more likely to be constrained
Does a Fed rate cut in September inevitable or are there still question marks around it?
Arnab Das: A September cut is extremely likely. Maybe, never say never, so not quite inevitable. But I think we have been moving in the direction of September cut for some time. Maybe the market has gotten ahead of itself in terms of the extent of the easing cycle. It had gotten ahead of itself a few times, I would say, in terms of when the easing would start, how deep the cuts would be, how fast and thick they would come.
But now we are more or less priced correctly for the very short term. I think we are on the cusp of an easing cycle, maybe not a very deep one, because I am sort of in the camp that we are going to have a bumpy landing, not a full-blown soft landing, but nor are we going to have a hard landing and a severe recession. So, we can talk more about that. But I think the message that is going to come across generally is data dependence and yet signalling the start of a rate cutting cycle without strong commitments to the pace and the extent of easing.
What about the
