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The Pivot

Claus Vistesen profile picture
Claus Vistesen


  • Inflation is still high, but it is no longer accelerating rapidly, and evidence of increasingly fragile economic activity is piling up.
  • The headline surveys have weakened materially, especially in Europe, and the US economy entered a technical recession in the first half of the year. For markets, this means monetary policy tightening will be less pervasive, both in terms of speed and sustainability.
  • Upside inflation surprises now are associated with sharp flattening, even inversion, of interest rate curves, as markets perceive the window for policy tightening closing fast.
  • This has led to a rally in bonds and a corresponding rebound in interest rate-sensitive equity sectors, the latter which has driven up major indices.

Currency and Exchange Stock Chart for Finance and Economy Display


In my last view on markets, I asked whether inflation fears had peaked. Judging by the price action since, the answer would seem to be "yes", tentatively. It’s a cliché, but true. Markets trade at the

This article was written by

Claus Vistesen profile picture
Claus Vistesen is a Danish economist who specialises in macroeconomics. He holds a postgraduate degree in Economics. His primary research interests include demographics, macroeconomics and international finance which he practices as Chief Eurozone Economist for Pantheon Macroeconomics. His contributions at Seeking Alpha represent his views alone, and have nothing to do with his employer. He can be contacted through his e-mail (clausvistesen@gmail.com) or through his website (clausvistesen.com) where you can also find most of his writing. He enjoys the interaction with Seeking Alpha readership a lot and will try to reply to all of the comments you throw his way.

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Comments (1)

Not a pivot yet, just a small pirouette. The Fed usually comes to the party late. Follow the bond market.
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