All Roads Lead to the Fed in the Remainder of 2024?

Eurizon SLJ Capital

In this episode of 'The Long and Short,' Eurizon SLJ Capital delves into significant macroeconomic events and themes from the past week, based on a LinkedIn newsletter by Neil Staines:

• The nomination of Scott Bessent as US Treasury Secretary signals a potential shift towards fiscal conservatism, challenging expectations of expansive fiscal policy under Trump, with implications for inflation and the US yield curve.
• Fed minutes from November highlighted signs of a weakening consumer and potential risks in commercial real estate, with uncertainties around the neutral rate but reduced risks of a sharp labour market downturn.
• Mixed commentary from Fed officials points towards a likely 25bp rate cut in December unless significant data surprises emerge, with cautious signals about the pace of rate cuts in 2025.
• Economic data suggests weakening trends, including contractionary ISM indices and subdued Beige Book findings, indicating a slowing but modestly growing economy.
• While corporate sectors may benefit from potential Trump policies, a bifurcation between corporate and consumer economic conditions could lead to heightened volatility in 2025.
• Amid ongoing uncertainty and volatility, the Federal Reserve's December reaction function remains pivotal in shaping global macroeconomic narratives heading into 2025.

00:00 Introduction to the Long and Short
00:25 Scott Bessent's Nomination and Fiscal Policy
01:56 Minute detail
03:04 Talking the Talk
04:26 Walking the Walk
05:35 A Furc in the road?
06:23 The long and short of it…
07:10 Disclaimer and Legal Information

The opinions expressed in this podcast are those of the presenters and do not necessarily reflect the views of Eurizon SLJ Capital, Eurizon Capital, or the Intesa Sanpaolo Group. The information and opinions shared are intended solely for professional investors and should not be relied upon by other investors. Please note that the information provided in this recording is for informational purposes only and is not intended to be complete or constitute an offer to buy or sell securities or any derivatives. It has not been prepared in accordance with legal and regulatory requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not constitute research on investment matters and should not be construed as containing any recommendation, advice or suggestion, implicit or explicit, for any investment strategy or financial instruments, the issuers of any financial instruments, or a solicitation, offer or financial promotion relating to any securities or investments. ESLJ and its affiliates do not assume any liability whatsoever for the contents of this podcast and do not make any representation or warranty as to the accuracy or completeness of any information contained in this communication.